Execution Copy





LIMITED
LIABILITY COMPANY OPERATING AGREEMENT




OF




PHUSION
LABORATORIES, LLC




a
Delaware limited liability company




Dated
March 22, 2010







TABLE
OF CONTENTS




PageARTICLE
      1 DEFINITIONS AND CONSTRUCTION
                    
                    11.1
                    Definitions
      (PSI Parent)
                    
                    11.2
                    Construction
      (PSI Parent)
                    
                    17ARTICLE
      2 GENERAL
                    
                    182.1
                    Formation
      of the Company
                    
                    182.2
                    Name
                    
                    182.3
                    Purpose
      and Powers
                    
                    182.4
                    Principal
      Place of Business
                    
                    182.5
                    Term
      of the Company
                    
                    182.6
                    Statutory
      Compliance
                    
                    182.7
                    Nature
      of Agreement
                    
                    19ARTICLE
      3 ANNUAL PLANS
                    
                    193.1
                    Adoption
      of Annual Plans (PSI Parent)
                    
                    193.2
                    Amendments
      to Annual Plans (PSI Parent)
                    
                    193.3
                    Company
      Operations (PSI Parent)
                    
                    19ARTICLE
      4 COMMERCIALIZATION OF PRODUCTS
                    
                    194.1
                    Selection
      of OTC Drugs and Product Class for Commercialization (PSI
      Parent)
                    
                    194.2
                    Obligations
      of PSI and PSI Parent in Connection with the Commercialization of Approved
      Products (PSI Parent)
                    
                    214.3
                    Quigley’s
      Obligations in Connection with the Commercialization of Developed Products
      (PSI Parent)
                    
                    224.4
                    Reputation
      of Products (PSI Parent). The Parties shall cooperate to establish and
      maintain the reputation of Developed Products
                    
                    224.5
                    Funding
      (PSI Parent)
                    
                    224.6
                    Reimbursement
      of Expenses (PSI Parent)
                    
                    234.7
                    Cap
      on Quigley Funding Obligations (PSI Parent)
                    
                    244.8
                    Intellectual
      Property Ownership
                    
                    24ARTICLE
      5 ADMISSION OF MEMBERS AND CAPITAL ACCOUNTS
                    
                    245.1
                    Initial
      Members and Initial Capital Contributions (PSI Parent)
                    
                    245.2
                    Units
                    
                    245.3
                    Capital
      Accounts
                    
                    24ARTICLE
      6 ADDITIONAL CAPITAL, CONTRIBUTIONS, RETURN OF CAPITAL CONTRIBUTIONS AND
      MEMBER LOANS
                    
                    266.1
                    Additional
      Capital Contributions
                    
                    266.2
                    Return
      of Member Capital Contributions
                    
                    266.3
                    Member
      Loans
                    
                    266.4
                    No
      Liability of Member for Debts and Obligations of the
    Company
                    
                    276.5
                    Registered
      Owner
                    
                    27ARTICLE
      7 MEMBERS
                    
                    277.1
                    No
      Management By Members
                    
                    277.2
                    Limited
      Liability
                    
                    277.3
                    Admission
      of Members
                    
                    27








7.4
                Withdrawal
      or Resignation
                
                287.5
                Meetings
                
                287.6
                Action
      by the Members
                
                29ARTICLE
      8 BOARD OF MANAGERS
                
                318.1
                Establishment
      of Board
                
                318.2
                Powers
                
                318.3
                Qualifications,
      Number and Appointment
                
                318.4
                Term
                
                328.5
                Removal
                
                328.6
                Resignation
                
                328.7
                Vacancies
                
                328.8
                Chairman;
      Vice Chairman
                
                328.9
                Meetings
                
                338.10
                Action
      by the Board
                
                348.11
                Compensation
                
                358.12
                Committees
                
                35ARTICLE
      9 OFFICERS
                
                359.1
                Qualifications
      and Appointment
                
                359.2
                Authority
      of Officers
                
                359.3
                Removal,
      Resignation and Filling of Vacancy of Officers
                
                369.4
                Compensation
      of Officers
                
                37ARTICLE
      10 ALLOCATIONS
                
                3710.1
                Allocations
      of Net Profits and Net Losses
                
                3710.2
                Special
      Allocations
                
                3710.3
                Other
      Allocation Rules
                
                3910.4
                Tax
      Allocations; Code Section 704(c) Allocations
                
                40ARTICLE
      11 DISTRIBUTIONS
                
                4011.1
                Determination
      of Net Cash Proceeds
                
                4011.2
                Tax
      Distributions
                
                4111.3
                Distributions
      Other than Upon a Sale of the Company
                
                4111.4
                Distributions
      Upon a Sale of the Company
                
                4111.5
                Distributions
      and Forfeiture of Units in Connection with a Liquidity
    Event
                
                4211.6
                Withholding
                
                42ARTICLE
      12 BOOKS, RECORDS AND REPORTS
                
                4212.1
                Reporting
      and Accounting
                
                4212.2
                Delivery
      of Information
                
                42ARTICLE
      13 TAX MATTERS
                
                4313.1
                Tax
      Matters Member
                
                4313.2
                Tax
      Returns
                
                4313.3
                Partnership
      Status for Income Tax Purposes
                
                43ARTICLE
      14 TRANSFER OF UNITS
                
                4314.1
                Restriction
      on Transfers (PSI Parent)
                
                4414.2
                Permitted
      Transfers (PSI Parent)
                
                4414.3
                Certain
      Prohibited Transfers (PSI Parent)
                
                4414.4
                Termination
      of Restrictions (PSI Parent)
                
                4514.5
                Rights
      of Assignees (PSI Parent)
                
                45


- ii
-





14.6
                Admission
      of Assignees as Members (PSI Parent)
                
                4514.7
                Withdrawal
      of Members Upon Admission of Assignee (PSI Parent)
                
                4614.8
                Incapacity
      of Member (PSI Parent)
                
                4614.9
                Death
      of a Member (PSI Parent)
                
                46ARTICLE
      15 RIGHT OF FIRST REFUSAL
                
                4615.1
                Notice
      of Proposed Sale
                
                4715.2
                Exercise
      of Right of First Refusal
                
                4715.3
                Payment;
      Closing
                
                4815.4
                Selling
      Member’s Right to Sell
                
                4815.5
                Termination
      of Rights of First Refusal
                
                49ARTICLE
      16 TAG-ALONG RIGHTS
                
                4916.1
                Right
      to Participate in Proposed Sale
                
                4916.2
                Exercise
      of Tag-Along Right
                
                4916.3
                Payment;
      Closing
                
                4916.4
                Selling
      Member’s Right to Sell
                
                5016.5
                Termination
      of Tag-Along Rights
                
                50ARTICLE
      17 STANDARDS OF CONDUCT, EXCULPATION, INDEMNIFICATION AND
      INSURANCE
                
                5117.1
                Standards
      of Conduct (PSI Parent)
                
                5117.2
                Liability
      (PSI Parent)
                
                5117.3
                Exculpation
      (PSI Parent)
                
                5217.4
                Indemnification
      (PSI Parent)
                
                5217.5
                Expenses
      (PSI Parent)
                
                5317.6
                Insurance
      (PSI Parent)
                
                5317.7
                Third-Party
      Beneficiary Status (PSI Parent)
                
                53ARTICLE
      18 CONFIDENTIALITY
                
                5318.1
                Confidentiality
      Obligations (PSI Parent)
                
                5318.2
                Certain
      Limitations on Confidentiality Obligations (PSI Parent)
                
                5418.3
                Term
      (PSI Parent)
                
                55ARTICLE
      19 DISSOLUTION AND LIQUIDATION
                
                5519.1
                Limitations
                
                5519.2
                Exclusive
      Causes
                
                5519.3
                Effect
      of Dissolution
                
                5519.4
                No
      Capital Contribution upon Dissolution
                
                5619.5
                Liquidation
                
                5619.6
                Deferral;
      Distribution in Kind
                
                57ARTICLE
      20 MISCELLANEOUS
                
                5720.1
                Notices
      (PSI Parent)
                
                5720.2
                Guaranty
      (PSI Parent)
                
                5920.3
                Pre-Initial
      Public Offering Transaction (PSI Parent)
                
                5920.4
                Amendments
      (PSI Parent)
                
                6020.5
                Waivers
      (PSI Parent)
                
                6020.6
                Successors
      and Assigns (PSI Parent)
                
                6120.7
                Governing
      Law (PSI Parent)
                
                6120.8
                Dispute
      Resolution and Arbitration (PSI Parent)
                
                6120.9
                Counterparts
      (PSI Parent)
                
                61


- iii
-





20.10
                Effectiveness
      (PSI Parent)
                
                6120.11
                No
      Third-Party Beneficiaries (PSI Parent)
                
                6220.12
                Entire
      Agreement (PSI Parent)
                
                6220.13
                Captions
      (PSI Parent)
                
                6220.14
                Severability
      (PSI Parent)
                
                6220.15
                Interpretation
      (PSI Parent)
                
                6220.16
                Consent
      to Jurisdiction and Venue (PSI Parent)
                
                6220.17
                Specific
      Performance (PSI Parent)
                
                6220.18
                Further
      Assurances (PSI Parent)
                
                6320.19
                Signed
      Writings (PSI Parent)
                
                6320.20
                Business
      Days (PSI Parent)
                
                6320.21
                Access
      to Counsel (PSI Parent)
                
                6320.22
                Employment
      (PSI Parent)
                
                6320.23
                Indemnification
      Against Certain Claims (PSI Parent)
                
                6320.24
                Reimbursement
      of Certain Expenses (PSI Parent)
                
                6320.25
                Controlling
      Provisions (PSI Parent)
                
                63





Exhibit A:
                    Member
      ScheduleExhibit B:
                    Initial
      ManagersExhibit C:
                    List
      of Certain
Compounds


- iv
-




LIMITED
LIABILITY COMPANY OPERATING AGREEMENT


OF


PHUSION
LABORATORIES, LLC




This
Limited Liability Company Operating Agreement of Phusion Laboratories, LLC
(this “Agreement”), dated as
of March 22, 2010 (the “Effective Date”), is
made by and among Phusion Laboratories, LLC, a Delaware limited liability
company (the “Company”), The
Quigley Corporation, a Nevada corporation (“Quigley”),
Phosphagenics Inc., a Delaware corporation  (“PSI” and,
collectively with Quigley, the “Initial Members”),
Phosphagenics Ltd., an Australian corporation (“PSI Parent”), for
purposes of Articles 1,
3, 4, 14, 17, 18 and 20 and Sections 5.1 and
9.1(d), and
such other Persons (as defined below) that are holders of Units (as defined
below) and/or Unit Equivalents (as defined below) and that become a party hereto
in accordance with the terms hereof (such other Persons, collectively with the
Initial Members, the “Members”; the
Members, PSI Parent and the Company, collectively, the “Parties”).




A.           The
Company was formed on March 16, 2010 (the “Formation Date”) upon
the filing of its certificate of formation (the “Certificate of
Formation”).




B.           PSI
was formed as a wholly owned Subsidiary (as defined below) of PSI Parent for the
purpose of acquiring an interest in the Company, and PSI Parent will derive
substantial benefit from its ownership of PSI and PSI’s ownership interest in
the Company.




C.           The
Parties desire to enter into this Agreement to reflect the admission of each
Initial Member as a member of the Company, to set forth the manner in which the
business and affairs of the Company will be managed and to set forth the
Parties’ respective rights, duties and obligations with respect to the
Company.




D.           Contemporaneously
with the effectiveness of this Agreement, the Initial Members, PSI Parent and
the Company are entering into a contribution agreement (the “Contribution
Agreement”), pursuant to which, among other things, Quigley is
(i) assigning all of its rights and obligations under the License Agreement
(as defined below) to the Company and (ii) contributing $500,000 to the
Company.




The
Parties hereby agree as follows:




ARTICLE
1


DEFINITIONS
AND CONSTRUCTION




1.1           Definitions (PSI
Parent) . As used
herein, the following capitalized terms have the following respective
meanings:




“Act” means the
Delaware Limited Liability Company Act, 6 Del. C. §18-101, et. seq.




“Adjusted Capital Account
Deficit” means, with respect to any Member, the deficit balance, if any,
in such Member’s Capital Account as of the end of the relevant Allocation Year,
after giving effect to the following adjustments:


-1-


(i)           credit
to such Capital Account any amounts that such Member is deemed to be obligated
to restore pursuant to the penultimate sentence of each of Regulations Sections
1.704-2(g)(1) and 1.704-2(i)(5); and




(ii)          debit
to such Capital Account the items described in paragraphs (4), (5) and (6) of
Regulations Section 1.704-1(b)(2)(ii)(d).




The
foregoing definition of Adjusted Capital Account Deficit is intended to comply
with Regulations Section 1.704-1(b)(2)(ii)(d) to the extent relevant thereto and
is to be interpreted consistently therewith.




“Affiliate” means,
with reference to a specified Person: (i) a Person that, directly or
indirectly, controls, is controlled by, or is under common control with the
specified Person; or (ii) any Person that is an officer, director, general
partner, manager, or trustee of, or serves in a similar capacity with respect
to, the specified Person, or for which the specified Person is an officer,
director, general partner, manager, or trustee, or serves in a similar
capacity.




“Agreement” has the
meaning set forth in the preamble.




“Allocation Year”
means (i) the period commencing on the Effective Date and ending on
December 31, 2010, (ii) any subsequent period commencing on
January 1 and ending on the following December 31, or (iii) any
portion of the period described in the foregoing clause (i) or (ii) for
which the Company is required to allocate Net Profits, Net Losses and other
items of Company income, gain, loss or deduction pursuant to Article 10.




“Annual Plan” has the
meaning set forth in Section 3.1.




“Anti-Wrinkle Creams”
means proprietary formulations developed by PSI Parent containing TPM in
combination with retinol, ubiquinone, acetyl octapeptide, l-carnosine and such
other additives as the parties may agree; provided, however, that the
Company will not have rights to anti-wrinkle cream products sold in high-end,
up-scale retail stores, such as (by way of example) Nieman Marcus and
Bloomingdales.




“Approved by the
Board,” “Approval of the
Board,” “Board
Approval,” “determined by the
Board,” “determination of the
Board,” “Board
determination” or similar expressions mean the Majority Vote of the
Board, acting in its sole and absolute discretion, except as otherwise required
by Law or any of the Company’s Organizational Documents.




“Approved Excess Marketing
Costs” means, with respect to an Approved Product, any Marketing Costs
with respect to such Approved Product in excess of $500,000 that PSI and Quigley
have agreed to expend.




“Approved Product”
means any Proposed Product for which the Company has determined, in accordance
with Section 4.1(d),
that there is a reasonable likelihood that such Proposed Product will be capable
of becoming one or more Developed Product and for which a Budget has been agreed
upon in accordance with Section 4.1(d).


-2-


“Assignee” means any
Person (i) to which a Member Transfers, in accordance with the terms
hereof, all or any part of the Units or Economic Interest that such Member
directly holds and (ii) that has not been admitted as a Member in
accordance with Section 14.6.




“Assumed Tax Rate”
means, for any Fiscal Quarter, 35%, or such other rate as may from time to time
be determined by the Board.




“Bankruptcy” means the
occurrence of any one or more of the events set forth in Section 18-101(1)
of the Act.




“Board” has the
meaning set forth in Section 8.1.




“Board Meeting” means
a meeting of the Board, whether such meeting is regular or special in
nature.




“Budget” has the
meaning set forth in Section
4.1(d)(i).




“Business” means the
formulation, development, marketing, distribution and sale of products that
contain PSI Technologies and that fall within the scope of the License Agreement
between PSI Parent and the Company.




“Business Day” means a
day other than a Saturday, Sunday, federal or New York State holiday or other
day on which commercial banks in New York City are authorized or required by law
to close.




“Capital Account”
means the capital account established and maintained for each Member pursuant to
Section 5.3.




“Capital
Contributions” means, with respect to each Member, the aggregate amount
of cash and the initial Gross Asset Value of any property (net of liabilities
assumed or taken subject to by the Company, without duplication) contributed by
or in the name of such Member in connection with the issuance of Units or
otherwise.




“CEO” means the
Quigley Designated CEO or the PSI Designated CEO, as the case may
be.




“Certificate of
Formation” has the meaning set forth in the recitals.




“Code” means the
United States Internal Revenue Code of 1986, as amended.




“Commercialize” means,
with respect to any Proposed Product, to take appropriate steps to accomplish or
achieve the commercialization of such Proposed Product.




“Company” has the
meaning set forth in the preamble.




“Company Affiliate”
means any Affiliate of the Company.




“Company Assets” means
the assets (including cash, properties, rights (contractual or otherwise), real
property, personal property, tangible property and intangible property) directly
held by the Company (including the equity interests of any Entity that the
Company directly holds).


-3-


“Company Entity” means
the Company or any of its Subsidiaries.




“Company Entity
Assets” means all assets held by the Company Entities.




“Company Minimum Gain”
has the meaning assigned the term “partnership minimum gain” in Regulations
Sections 1.704-2(b)(2) and 1.704-2(d).




“Company Sale” means
any arm’s-length transaction, whether by sale of Units, sale of Company Entity
Assets, merger, recapitalization, reorganization or otherwise, upon the
consummation of which one or more Persons (other than any Member or its
Affiliates prior to the consummation of such transaction) will own more than 50%
of the Voting Units or 50% of the Company Entity Assets, in each case whether
effected pursuant to a single transaction or series of related
transactions.




“Confidential
Information” means any information, data, methods, or plans now or any
time in the future developed, used or employed by the Company or any Company
Affiliate that (i) are maintained as confidential by the Company or any Company
Affiliate, (ii) are not generally known to or by a business that primarily
engages in a business in the same industry as the Business, or (iii) relate to
the Company, any Company Affiliates or any of their respective customers or
suppliers, financial affairs, marketing strategies, pricing, products,
processes, services, executives or similar internal affairs.




“Confidentiality
Agreement” means that confidentiality agreement previously entered into
between PSI Parent and Quigley.




“Contract” means any
agreement, contract, commitment, purchase order, undertaking, instrument or
other binding understanding, whether written or oral.




“Contribution
Agreement” has the meaning set forth in the recitals.




“Cosmetic Compounds”
means articles intended to be rubbed, poured, sprinkled, or sprayed on,
introduced into, or otherwise applied to the human body for cleansing,
beautifying, promoting attractiveness, or altering the appearance; provided, however, that a
product which contains an OTC Drug will not be deemed to be a Cosmetic Compound
even though it has the ancillary effect of cleansing, beautifying, promoting
attractiveness, or altering the appearance.




“Covered Person” means
any Member, any Manager, any Officer, any Person to whom the Board duly
delegates management responsibilities, or any Affiliate of a
Member.




“Customers” means
those persons and entities who distribute, wholesale, retail, purchase or
consume the goods and services offered by the Company.


-4-


“Depreciation” means,
for each Allocation Year or other period, an amount equal to the depreciation,
amortization, or other cost recovery deduction allowable with respect to an
asset for such period for federal income tax purposes, except that if the Gross
Asset Value of an asset differs from its adjusted basis for federal income tax
purposes at the beginning of such period, then Depreciation means an amount that
bears the same ratio to such beginning Gross Asset Value as the federal income
tax depreciation, amortization, or other cost recovery deduction for such period
bears to such beginning adjusted tax basis; provided, however, that if the
adjusted basis for federal income tax purposes of an asset at the beginning of
such period is zero, then Depreciation is to be determined with reference to
such beginning Gross Asset Value using any reasonable method determined by the
Board.




“Developed Product”
means, with respect to a Proposed Product, a product that has been developed
such that it is capable of being manufactured on a broad scale, either by a
Company Affiliate or by a Person that is unaffiliated with the Company, and that
is capable of being marketed and distributed as contemplated by the Budget with
respect to such Proposed Product.




“Development Costs”
means, with respect to the commercialization of a given Proposed Product, the
costs incurred by the Company, any Initial Member or any Initial Member’s
Affiliates associated with: (i) formulating one or more Developed Products
with respect to such Proposed Product; (ii) developing such Developed
Products; (iii) conducting such testing and clinical trial work as is
required to support the claims that the Parties intend to make with respect to
such Developed Products; (iv) the Research Program, patent investigation,
protection of Intellectual Property, regulatory advice related to such Proposed
Product and/or Developed Products; or (v) all other matters related to such
Proposed Product and/or Developed Products or required to produce and sell such
Developed Products as an OTC Drug, other than Marketing Costs.




“Development Program”
means all formulation development, research, preclinical studies and clinical
studies approved by the Company for any Proposed Product.




“Dietary Supplements”
means orally consumed products intended to provide nutrients to humans to
supplement any nutrient that may be missing from or not adequately consumed in a
person’s diet.




“Disability” means a
physical disability or mental incapacity that renders a Person unable to direct
his or her affairs for a period of 12 consecutive months.




“Drugs” means
substances or articles (other than a food or device) that are intended for use
in the diagnosis, cure, relief, treatment, or prevention of disease and any
articles intended to affect the structure or function of the body of man or
other animals. For the sake of clarity, Drugs do not include Cosmetic Compounds
or Dietary Supplements.




“Economic Interest”
means, with respect to a given Unit, the right with respect to such Unit to
share in the Net Profits, Net Losses, or similar items of (including items of
income, gain, loss, deduction or credit), and to receive distributions from, the
Company, but does not include any other rights of with respect to such Unit,
including the right to vote or to participate in the management of the Company,
or, except as specifically provided herein or as required under the Act, any
right to information concerning the business and affairs of the
Company.




“Effective Date” has
the meaning set forth in the preamble.




-5-


“Entity” means a
Person that is not a natural Person.




“Fair Market Value”
means, with respect to an asset, business or enterprise, and except as otherwise
expressly provided herein, the fair market value of such asset, business or
enterprise, as determined in good faith by the Board.




“Fiscal Quarter”
means, as the case may be, the quarterly period ending March 31,
June 30, September 30 or December 31.




“Fiscal Year” means
the yearly period ending December 31.




“Formation Date” has
the meaning set forth in the recitals.




“Funding Amount”
means, with respect to a given Member and a given Fiscal Quarter, the aggregate
amount of Marketing Costs (if any) and Development Costs (if any) for all
Approved Products (if any) and Developed Products (if any), as specified in the
Funding Notice with respect to such Fiscal Quarter, that such Member must fund,
plus any Approved Excess Marketing Costs that Quigley elects to contribute with
PSI’s consent to the Company as a Capital Contribution pursuant to Section 4.5(c)(ii).




“Funding Notice” has
the meaning set for in Section 4.5(c)(i).




“GAAP” means United
States generally accepted accounting principles, consistently
applied.




“Governmental Entity”
means any entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to any federal, state or local
government, or any international, multinational or other government, and any
department, commission, board, agency, instrumentality, political subdivision,
bureau, official or other regulatory, administrative or judicial authority of
any of the foregoing.




“Gross Asset Value”
means with respect to any asset, the adjusted basis of the asset for federal
income tax purposes, except as follows:




(i)           the
initial Gross Asset Value of any asset contributed by a Member to the Company
shall be the gross Fair Market Value of such asset;




(ii)          the
Gross Asset Values of all Company assets shall be adjusted to equal their
respective gross Fair Market Values (taking Code Section 7701(g) into account),
as reasonably determined by the Board as of the following times: (A) the
acquisition of an additional interest in the Company by a new or existing Member
in exchange for a more than de minimis Capital Contribution; (B) the
distribution by the Company to a Member of more than a de minimis amount of
Company assets as consideration for an interest in the Company; (C) the
liquidation of the Company within the meaning of Regulations Section
1.704-1(b)(2)(ii)(g); and (D) the issuance of a Unit or Units in exchange for
services rendered or to be rendered; provided, that an
adjustment described in clause (A), (B) and (D) of this paragraph shall be made
only if the Board reasonably determines that such adjustment is necessary to
reflect the relative economic interests of the Members in the
Company;


-6-


(iii)         the
Gross Asset Value of any Company asset distributed to any Member shall be
adjusted to equal the gross Fair Market Value (taking Code Section 7701(g) into
account) of such Company asset on the date of distribution as reasonably
determined by the Board; and




(iv)         the
Gross Asset Values of Company assets shall be increased (or decreased) to
reflect any adjustments to the adjusted basis of such Company assets pursuant to
Code Sections 734(b) or 743(b), but only to the extent that such adjustments are
taken into account in determining Capital Accounts pursuant to Regulations
Section 1.704-1(b)(2)(iv)(m) and paragraph (vi) of the definition of “Net
Profits” and “Net Losses” or Section 10.2(g);
provided, however, that Gross
Asset Values shall not be adjusted pursuant to this paragraph (iv) to the extent
that an adjustment pursuant to paragraph (ii) of the definition of “Gross Asset
Value” is required in connection with a transaction that would otherwise result
in an adjustment pursuant to this paragraph (iv).




If the
Gross Asset Value of an asset has been determined or adjusted pursuant to
paragraphs (i), (ii) or (iv) of the definition of “Gross Asset Value”, then such
Gross Asset Value shall thereafter be adjusted by the Depreciation taken into
account with respect to such asset for purposes of computing Net Profits and Net
Losses.




“Guarantee” of or by
any Person (any such Person, a “Guarantor”) means any
obligation, contingent or otherwise, of the Guarantor guaranteeing or having the
economic effect of guaranteeing any Indebtedness or other obligation of any
other Person (any such Person, a “primary obligor”) in
any manner, whether directly or indirectly, and including any obligation of such
Guarantor, direct or indirect, (i) to purchase or pay (or advance or supply
funds for the purchase or payment of) such Indebtedness or other obligation or
to purchase (or to advance or supply funds for the purchase of) any security for
the payment thereof, (ii) to purchase or lease property, Securities or
services for the purpose of assuring the owner of such Indebtedness or other
obligation of the payment thereof, (iii) to maintain working capital,
equity capital or any other financial statement condition or liquidity of such
primary obligor so as to enable such primary obligor to pay such Indebtedness or
other obligation or (iv) as an account party in respect of any letter of
credit or letter of guaranty issued to support such Indebtedness or
obligation.




“Guaranty” has the
meaning set forth in Section
20.2(a).




“Immediate Family”
means, with respect to a Person who is a natural person, such Person’s current
spouse or legal domestic partner, parents, parents-in-law, grandparents,
children, siblings and grandchildren, or a trust, estate, or other
estate-planning vehicle, all of the beneficiaries of which consist of such
Person or members of such Person’s Immediate Family.




“Incapacity” means,
with respect to a specified Person, the Bankruptcy, death, Disability,
adjudication of incompetence, dissolution or termination, as the case may be, of
such Person.


-7-


“Indebtedness” means,
with respect to a specified Person and without duplication: (i) all
Liabilities of such Person for borrowed money or with respect to deposits or
advances of any kind; (ii) all Liabilities of such Person evidenced by
bonds, debentures, notes or similar instruments; (iii) all Liabilities of
such Person upon which interest charges are customarily paid; (iv) all
Liabilities of such Person under conditional sale or other title retention
agreements relating to property acquired by such Person; (v) all
Liabilities of such Person in respect of the deferred purchase price of property
or services or other similar contingent payment Liabilities; (vi) all
Indebtedness of others secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien on
property owned or acquired by such Person, whether or not the Indebtedness
secured thereby has been assumed; (vii) all Guarantees by such Person of
Indebtedness of others; (viii) all capitalized lease obligations of such
Person; (ix) all Liabilities of such Person as an account party in respect
of letters of credit and letters of guaranty; (x) all Liabilities of such
Person in respect of bankers’ acceptances; (xi) the Indebtedness of any
other Entity to the extent such Person is liable therefor as a result of such
Person’s ownership interest in or other relationship with such Entity, except to
the extent the terms of such Indebtedness provide that such Person is not liable
therefor; and (xii) any interest, fees and other expenses with respect to
any of the foregoing.




“Indemnified Party”
has the meaning set forth in Section
20.23.




“Indemnifying Party”
has the meaning set forth in Section
20.23.




“Initial Member Units”
means the Quigley Units and the PSI Units, collectively.




“Initial Members” has
the meaning set forth in the preamble.




“Initial Public
Offering” means a registered public offering of Securities of (i) any
Company Entity or (ii) any Newco.




“Intellectual
Property” means, collectively: (a) all inventions (whether or not reduced
to practice), and all improvements thereto, and all Patents; (b) all Trademarks,
all goodwill associated therewith, and renewals or extensions in connection
therewith; (c) all works of authorship, all copyrights and moral rights relating
thereto and all applications, registrations and renewals in connection
therewith; (d) all mask works and all applications, registrations and renewals
in connection therewith; (e) all trade secrets and confidential business
information (including confidential ideas, research and development, know how,
show how, methods, formulas, compositions, manufacturing and production
processes and techniques, technical data, designs, drawings, specifications,
customer and supplier lists, pricing and cost information, and business and
marketing plans and proposals), invention disclosures, technology, discoveries,
improvements, specifications, designs, formulae, techniques, technical data and
manuals, methods and processes, and all other proprietary information and data;
(f) all internet domain names and registrations therefor; (g) all copies and
tangible embodiments of each of the foregoing (in whatever form or medium); (h)
all modifications, improvements and derivatives of each of the foregoing; and
(i) the right to seek past, present and future damages, including with respect
to third-party infringement and misappropriation.




“IRS” means the
Internal Revenue Service.


-8-


“Joinder Agreement”
means a joinder agreement, in a form satisfactory to the
Board,  pursuant to which the Person signing such joinder agreement
agrees to become a Member and a party hereto, subject to the rights and
obligations hereunder.




“Key Party” has the
meaning set forth in Section 17.1(a).




“Law” means any
constitution, law, statute, treaty, rule, directive, ordinance, requirement,
compact or agreement with or by any Governmental Entity, any Order and any rules
or regulations of any self-regulatory organization.




“Liabilities” means
any and all liabilities, debts, claims, losses, expenses, damages, fines, costs,
royalties, deficiencies, obligations or commitments of any nature whatsoever
(whether asserted or unasserted, disclosed or undisclosed, direct or indirect,
known or unknown, absolute or contingent, determined or undeterminable, on- or
off-balance sheet, liquidated or unliquidated, accrued or unaccrued, matured or
unmatured, due or to become due or otherwise, regardless of when asserted and
whether or not resulting from third-party claims), including any liability for
taxes and any of the foregoing arising under any Law, Order or
Contract.




“License Agreement”
means that certain License Agreement, dated as of the Effective Date, by and
between PSI Parent and Quigley.




“Lien” means any
security interest (whether or not perfected), pledge, bailment (in the nature of
a pledge or for purposes of security), mortgage, deed of trust, grant of a power
to confess judgment, conditional sale, trust receipt or other title retention
agreement (including any lease in the nature thereof), lien, charge,
encumbrance, claim, reservation, restriction (including any limitation on a
voting right), right of first refusal or first offer or other third-party right,
option, license, hypothecation, assessment, covenant, right-of-way,
encroachment, easement, tenancy, equity or other similar arrangement or interest
in or with respect to real or personal property (including any of the foregoing
created by, arising under or evidenced by any conditional sale or other title
retention agreement, any financing lease having substantially the same economic
effect as any of the foregoing, or the filing of any financing statement naming
the owner of the asset to which such Lien relates as debtor under the Uniform
Commercial Code or any comparable Law).




“Liquidation Assets”
has the meaning set forth in Section
19.5(b)(ii).




“Liquidation FMV” has
the meaning set forth in Section
19.5(b)(ii).




“Liquidation
Statement” has the meaning set forth in Section
19.5(b)(ii).




“Liquidator” has the
meaning set forth in Section
19.5(a).




“Liquidity Event”
means an Initial Public Offering or a Company Sale.




“Losses” has the
meaning set forth in Section 17.3(a).


-9-


“Majority Vote” means:
(i) with respect to the Members, the affirmative vote or consent of Members
entitled to vote (or any specified subset thereof) with respect to a matter
holding of record, in the aggregate, a majority of the Units held of record by
all Members entitled to vote (or by such specified subset) with respect to such
matter at a Member Meeting at which a Quorum is present that includes the
affirmative vote of a majority in interest of the Members holding Quigley Units
at such time and a majority in interest of the Members holding PSI Units at such
time; and (ii) with respect to the Board, the affirmative vote or consent
of the Managers entitled to cast a majority of the votes at a Board Meeting at
which a Quorum is present that includes the affirmative vote of at least one
Quigley Designated Manager and at least one PSI Designated Manager (except that
such Majority Vote need not include the affirmative vote of a Quigley Designated
Manager or a PSI Designated Manager, as the case may be, if no Quigley
Designated Managers or PSI Designated Managers, respectively, are required to be
present at such Board Meeting in order for there to be a Quorum at such Board
Meeting).




“Managers” has the
meaning set forth in Section 8.1.




“Marketing Costs”
means, with respect to the commercialization of a given Proposed Product, the
costs incurred by the Company, any Initial Member or any Initial Member’s
Affiliates associated with packaging, performing market tests, advertising and
promoting such Proposed Product and/or one or more Developed Products with
respect to such Proposed Product.




“Members” has meaning
set forth in the Preamble.




“Member Meeting” means
a meeting of the Members, whether such meeting is regular or special in
nature.




“Member Nonrecourse
Debt” has the meaning assigned to the term “partner nonrecourse debt” in
Regulations Section 1.704-2(b)(4).




“Member Nonrecourse Debt
Minimum Gain” means that amount determined in accordance with the
principles of Regulations Section 1.704-2(i)(3) pertaining to “partner
nonrecourse debt minimum gain.”




“Member Nonrecourse
Deductions” has the meaning assigned to the term “partner nonrecourse
deductions” in Regulations Sections 1.704-2(i)(1) and
1.704-2(i)(2).




“Member Schedule”
means Exhibit
A.




“Membership Interest”
means, with respect to a Member, such Member’s entire ownership interest in the
Company, including such Member’s Economic Interest, all rights to vote and
otherwise participate in the affairs of the Company, as applicable, and the
rights to all benefits to which such Member is entitled as provided herein,
together with the obligations of such Member to comply with all of the terms
hereof.




“Net Cash Proceeds”
means, with respect to a given Fiscal Year, an amount (as reasonably determined
by the Board) equal to the aggregate amount of gross cash proceeds from the
Company’s operations (other than Capital Contributions) during such Fiscal Year
less the portion thereof used to pay or establish reserves for all expenses,
debt payments, capital improvements, replacements, and contingencies, in each
case as contemplated by the applicable Annual Plan or Annual Plans in effect
during such period or as otherwise reasonably paid or reserved in respect of
such Fiscal Year.


-10-


“Net Profits” and
“Net Losses”
mean, for each Allocation Year or other period, an amount equal to the Company’s
taxable income or loss, respectively, for such Allocation Year or other period
determined in accordance with Code Section 703(a) (for this purpose, all items
of income, gain, loss, or deduction required to be stated separately pursuant to
Code Section 703(a)(1) shall be included in taxable income or loss), with the
following adjustments (without duplication):




(i)           any
income of the Company that is exempt from federal income tax and not otherwise
taken into account in computing Net Profits or Net Losses shall be
included;




(ii)          any
expenditures of the Company described in Code Section 705(a)(2)(B) (including
expenditures treated as such pursuant to Regulations Section
1.704-1(b)(2)(iv)(i)), and not otherwise taken into account in computing Net
Profits or Net Losses, shall be subtracted;




(iii)         if
the Gross Asset Value of any Company asset is adjusted pursuant to paragraphs
(ii) or (iii) of the definition of “Gross Asset Value,” then the amount of such
adjustment shall be treated as an item of gain (if the adjustment increases the
Gross Asset Value of such Company asset) or an item of loss (if the adjustment
decreases the Gross Asset Value of such Company asset) from the disposition of
such Company asset and shall be taken into account for purposes of computing Net
Profits or Net Losses;




(iv)         gain
or loss resulting from any disposition of Company assets, with respect to which
gain or loss is recognized for federal income tax purposes, shall be computed by
reference to the Gross Asset Value of the Company assets disposed of,
notwithstanding that the adjusted tax basis of such Company assets differs from
its Gross Asset Value;




(v)          in
lieu of the depreciation, amortization and other cost recovery deductions taken
into account in computing such taxable income or loss, there shall be taken into
account Depreciation for such Allocation Year or other period, computed in
accordance with the definition thereof;




(vi)         to
the extent an adjustment to the adjusted tax basis of any Company assets
pursuant to Code Section 734(b) is required pursuant to Regulations Section
1.704-1(b)(2)(iv)(m)(4) to be taken into account in determining Capital Accounts
as a result of a distribution other than in complete liquidation of a Member’s
Units, the amount of such adjustment shall be treated as an item of gain (if the
adjustment increases the basis of such Company asset) or loss (if the adjustment
decreases the basis of such Company asset) from the disposition of such Company
asset and shall be taken into account for purposes of computing such Net Profits
or Net Losses; and


-11-


(vii)        notwithstanding
any other provision of this definition, any items that are specially allocated
under Section 10.2
shall not be taken into account in computing Net Profits or Net
Losses.




The
amounts of the items of Company income, gain, loss, or deduction available to be
specially allocated pursuant to Section 10.2
shall be determined by applying rules analogous to those set forth in paragraphs
(i) through (vi) above.




“Newco” means any
Entity formed for the purpose of effecting an Initial Public Offering, including
any Entity into which a Company Entity is converted.




“Newco Shares” has the
meaning set forth in Section 20.3(a).




“Non-Initial Member
Units” means Units that are not Initial Member Units.




“Nonprescription
Drugs” means Drugs which in the United States may be dispensed without a
prescription issued from a licensed professional with governmental approval to
prescribe Drugs. For the purposes hereof, Nonprescription Drugs shall include,
but not be limited to, caffeine solely for use in energy-related products.
Additionally, for the purposes of clarity, Nonprescription Drugs shall include
nicotine. Additionally, Nonprescription Drugs shall not include the drug
diclofenac. Nonprescription Drugs also shall include those products listed as
such in the United States Homeopathic Pharmacopeia. For the avoidance of doubt,
if a Drug is a prescription Drug in the United States as of the Effective Date,
but such prescription Drug subsequently becomes a non-prescription Drug in the
United States, then such Drug will be deemed to be a “Nonprescription Drug” for
purposes hereof.




“Nonrecourse
Deductions” has the meaning assigned to the term “nonrecourse deductions”
in Regulations Sections 1.704-2(b)(1) and 1.704-2(c).




“Notice” has the
meaning set forth in Section 20.1.




“Offered Price” has
the meaning set forth in Section 15.1(d).




“Offered Units” has
the meaning set forth in Section 15.1.




“Offered Units Closing
Date” has the meaning set forth in Section 15.3(b)(i)(C).




“Officer” means an
officer of the Company appointed in accordance with the terms
hereof.




“Order” means any
award, injunction, judgment, decree, order, writ, determination, ruling,
subpoena or verdict or other decision issued, promulgated or entered by any
Governmental Entity of competent jurisdiction.




“Organizational
Documents” means, with respect to any Entity, such Entity’s certificate
of incorporation, articles of incorporation, bylaws, articles of organization,
constitution, partnership agreement, limited liability company agreement,
formation agreement, trust agreement and other similar organizational documents
of such Entity (including, with respect to the Company, the Certificate of
Formation and this Agreement).


-12-


“OTC Drugs” means
Nonprescription Drugs that are permitted by law to be sold directly to consumers
in the United States.




“Parties” has the
meaning set forth in the preamble.




“Patents” means all
letters patent and pending applications for, and disclosures related to, patents
of any jurisdictions throughout the world and all reissues, reexaminations,
divisions, continuations and extensions thereof.




“Per Unit Officer
Price” has the meaning set forth in Section 15.1(d).




“Permitted Transferee”
means, with respect to a Member as of a given time, (i) an Affiliate of
such Member at such time, (ii) a member of such Member’s Immediate Family
at such time to whom Units are Transferred by will, by intestacy, as a gift or
otherwise for estate planning purposes, or (iii) a trust exclusively for
the benefit of such Member or one or more members of such Member’s Immediate
Family, r a combination of the foregoing, to which Units are Transferred by
will, by intestacy, as a gift or otherwise for estate planning
purposes.




“Person” means an
individual, a corporation, a partnership, a limited liability company, a trust,
an unincorporated association, a Governmental Entity or any other entity or
body.




“Pre-Initial Public Offering
Transaction” means any of the following actions taken in anticipation of
or otherwise in connection with an Initial Public Offering: (i) a transfer of
all or substantially all of the Company Entity Assets or Units to a Newco; (ii)
a merger or consolidation of any Company Entity into or with a Newco; or (iii)
another restructuring of all or substantially all of the Company Entity Assets
or Units into a Newco, including by way of the conversion of the Company into a
corporation.




“Product Class” means
the class of products for human consumption or usage (including topical, oral
and inhaled usage) that are OTC Drugs or Anti-Wrinkle Creams. Additionally, a
product using any of the compounds set forth in Exhibit C in
combination with an OTC Drug and a product using any of the compounds set forth
in Exhibit C that
is part of a regimen or routine that includes the application of an OTC Drug are
hereby deemed to be products within the Product Class available to the Company
on a non-exclusive basis pursuant to the License Agreement. By way of example
only, the Company may be permitted to use the licensed technology in a non-OTC
Drug product as part of a regimen or routine that includes the application of an
OTC Drug. For illustrative purposes only, if an acne treatment program includes
the use of non-OTC Drug products containing TPM, then the Company may market and
sell cleaning and moisturizing products containing TPM.




“Program Patents” has
the meaning set forth in the License Agreement.




“Proposed Product” has
the meaning set forth in Section 4.1(b).




“Proposed Sale” has
the meaning set forth in Section 15.1(a).


-13-


“Proposed Sale Notice”
has the meaning set forth in Section 15.1.




“Proposed Sale Notice Receipt
Date” has the meaning set forth in Section 15.1.




“Proposed Transferee”
has the meaning set forth in Section 15.1(a).




“PSI” has the meaning
set forth in the preamble.




“PSI Designated CEO”
has the meaning set forth in Section 9.1(b)(ii).




“PSI Designated
Manager” has the meaning set forth in Section 8.3(b)(ii).




“PSI Intermediate
Entity” means any Subsidiary of PSI Parent that directly or indirectly
owns equity Securities of PSI.




“PSI Obligations” has
the meaning set forth in Section
20.2(a)(i).




“PSI Parent” has the
meaning set forth in the preamble.




“PSI Qualified
Expenses” means, with respect to any Approved Product or Developed
Product, as the case may be, any out-of-pocket costs incurred by PSI Parent or
any of its Affiliates in connection with such Person’s provision of services as
contemplated by, and performance of PSI’s and PSI Parent’s obligations under,
Section 4.2,
provided that the incurrence of any such costs was consistent (in terms of
amount and the scope and extent of services to which such cost relates) with the
Budget with respect to such Approved Product or Developed Product, respectively;
provided, however, that “PSI
Qualified Expenses” does not include (i) the costs of labor relating to any
such services, and (ii) any costs incurred prior to such Approved Product
of Developed Product, as the case may be, becoming an Approved
Product.




“PSI Technologies”
means those technologies of PSI Parent or its Subsidiaries that use tocopheryl
phosphates and any products developed by or on behalf of PSI Parent which are
substitutes for tocopheryl phosphate or which are used in combination with
tocopheryl phosphate.




“PSI Units” means, at
a given time, the Units directly held by PSI at such time or held by any
transferee to which any such Units have been Transferred in accordance
herewith.




“Quigley” has the
meaning set forth in the preamble.




“Quigley Designated
CEO” has the meaning set forth in Section 9.3(b)(i).




“Quigley Designated
Manager” has the meaning set forth in Section
8.3(b)(i).




“Quigley Qualified
Expenses” means, with respect to any Approved Product or Developed
Product, as the case may be, any out-of-pocket costs incurred by Quigley or any
of its Affiliates in connection with such Person’s provision of services as
contemplated by, and performance of Quigley’s obligations under, Section 4.3,
provided that the incurrence of any such costs was consistent (in terms of
amount and the scope and extent of services to which such cost relates) with the
Budget with respect to such Approved Product or Developed Product, respectively;
provided, however, that
“Quigley Qualified Expenses” does not include (i) the costs of labor
relating to any such services and (ii) any costs incurred prior to such
Approved Product of Developed Product, as the case may be, becoming an Approved
Product


-14-


“Quigley Units” means,
at a given time, the Units directly held by Quigley at such time or held by any
transferee to which any such Units have been Transferred in accordance
herewith.




“Quorum”
means:




(i)           in
the case of a Member Meeting, the holders of a majority of the Units;
and




(ii)          in
the case of a Board Meeting, Managers collectively holding a majority of all
Manager votes (after giving effect to Sections 8.10(b)(ii)
and/or (iii),
if applicable), including at least one Quigley Designated Manager and at least
one PSI Designated Manager; provided, however, that a
Quorum will be deemed not to be present unless an equal number of Quigley
Designated Managers and PSI Designated Managers is present.




“Receiving Party” has
the meaning set forth in Section 18.1.




“Regulations” means
the Income Tax Regulations, including Temporary Regulations, promulgated under
the Code.




“Regulatory
Allocations” has the meaning set forth in Section 10.2(h).




“Related Agreements”
means the License Agreement, the Contribution Agreement, the Share Transfer
Restriction Agreement, and the other documents, instruments and agreements
specifically referred to herein or therein, or delivered pursuant hereto or
thereto, collectively.




“Remaining Members”
has the meaning set forth in Section 15.1.




“Research Program”
means all research, experiments, product development efforts, formulations,
trials, experiments and other activities with respect to the creation of
products on behalf of the Company.




“ROFR Participation
Notice” has the meaning set forth in Section 15.2.




“ROFR Unit Purchase
Agreement” has the meaning set forth in Section 15.3(a).




“Security” means a
security, as defined in Section 2(a)(1) of the United States Securities Act
of 1933, as amended.




“Sell” means, with
respect to any Units, any act to sell, transfer or other dispose of such Units.
Each of “Sold”
and “Sale” has
a correlative meaning.




“Selling Member” has
the meaning set forth in Section
15.1.


-15-


“Share Transfer Restriction
Agreement” means the Share Transfer Restriction Agreement, dated as of
the Effective Date, by and between Quigley and PSI Parent, regarding, among
other things, (i) certain transfer restrictions with respect to, and other
terms applicable to, the shares of Quigley’s common stock issued to PSI Parent
in connection with the transactions contemplated by the License Agreement and
(ii) certain restrictions on PSI Parent’s acquisition of additional shares
of Quigley’s common stock.




“Specified Person” has
the meaning set forth in Section
17.4(b).




“Subsidiary” means,
with respect to any specified Person and at a given time, an Entity of which
such specified Person owns at such time, directly or indirectly, 50% or more of
the outstanding capital stock of such Entity, the holders of which are (i)
generally entitled to vote for the election of the board of directors or other
governing body of such Entity or (ii) generally entitled to share in the profits
or capital of such Entity.




“Substantial
Modification” means, with respect to Annual Plans or Budgets that have
been Approved by the Board in respect of a given year, changes to such Annual
Plans or Budgets, respectively, that would result (individually or in the
aggregate) in a change of 15% or more to the aggregate expenses reflected
therein, relative to the amount of the aggregate expenses reflected in such
Annual Plans or Budgets, respectively, as Approved by the Board.




“Suit” means any
investigation, charge, action, grievance, claim, proceeding (whether
administrative or otherwise), suit, arbitration or other dispute resolution
proceeding or litigation, in each case by or before any court of law or equity,
Governmental Entity or arbitrator.




“Tag-Along Member” has
the meaning set forth in Section 16.2.




“Tag-Along Unit Closing
Date” has the meaning set forth in Section 16.3(b)(i).




“Tag-Along Unit Purchase
Agreement” has the meaning set forth in Section 16.3(a).




“Tag-Along Units” has
the meaning set forth in Section 16.2.




“Tax Distribution” has
the meaning set forth in Section 11.2.




“Tax Matters Member”
has the same meaning as “tax matters partner” as defined in Code
Section 6231(a)(7).




“TPM” means tocopheryl
phosphate mixture.




“Trademarks” means
trademarks, service marks, trade dress, trade names, company names, logos,
slogans and other indicia of source or origin, all registrations and
applications for registration of any of the foregoing, all renewals thereof, all
translations, adaptations, derivations and combinations of the foregoing,
together with all goodwill associated with each of the foregoing, in any
jurisdiction throughout the world.


-16-


“Transfer” means, with
respect to any Security (including any Unit) or Economic Interest, (i) a
sale, conveyance, exchange, assignment, pledge, encumbrance, gift, bequest,
hypothecation, issuance or other transfer or disposition by any other means,
whether for value or not and whether voluntary or involuntary (including by
operation of law), with respect to such Security or Economic Interest,
respectively, (ii) the entry into a Contract that would afford a Person
(other than the direct holder of such Security or Economic Interest,
respectively) the right to direct all or a portion of the voting rights, or to
receive all or a portion of the economic benefits, with respect to such Security
or Economic Interest, respectively, or (iii) the entry into a Contract to
do any of the events described in the foregoing clauses (i) and (ii). Used
as a verb, “Transfer” means effecting any of the foregoing actions described in
this definition.




“Unit Equivalent”
means (i) any warrant, option, subscription or purchase right with respect
to a Unit, (ii) any Security convertible into, exchangeable for or
otherwise entitling the holder thereof to acquire any Unit or (iii) any
warrant, option, subscription or purchase right with respect to any Security
described in the foregoing clause (ii).




“Units” means any
units representing Membership Interests that the Company may issue from time to
time. Any reference herein to a “Unit” is deemed to also be a reference to the
Membership Interest represented by such Unit.




“Unreturned Capital”
means, with respect to Units and as of a given time, an amount equal to the
excess, if any, of (i) the aggregate Capital Contributions that have been
made in respect of such Units prior to such time (including any Capital
Contributions made to satisfy any funding obligations pursuant to Section 4.5),
over (ii) the aggregate amount of all prior distributions that the Company
has made in respect of such Units pursuant to Section 11.3(a)
or 11.4(a).




“Unreturned Funding
Amount” means, with respect to Units and as of a given time, an amount
equal to the excess, if any, of (i) the aggregate Capital Contributions
that have been made in respect of such Units to satisfy any funding obligations
pursuant to Section 4.5,
over (ii) the aggregate amount of all prior distributions that the Company
has made in respect of such Units pursuant to Section 11.3(a).




1.2         Construction (PSI
Parent).




(a)           Except
as otherwise expressly provided herein: (i) where a word or phrase is
defined herein, each of its other grammatical forms have a correlative meaning;
(ii) the terms “hereof,” “herein,” “hereunder,” “hereby,” “hereto,”
“herewith” and words of similar import are to be construed to refer to this
Agreement as a whole and not to any particular provision of this Agreement;
(iii) a reference herein to an Article, Section, paragraph, Exhibit or
Schedule is a reference to an Article, Section, paragraph, Exhibit or Schedule,
respectively, of or to this Agreement; (iv) the words “include,”
“includes,” and “including” as used herein are deemed to be followed by the
words “without limitation”; (v) the term “Dollars” and the symbol “$” mean
United States Dollars; and (vi) all accounting terms used and not defined
herein have the respective meanings given to them under GAAP.


-17-


(b)           Unless
otherwise expressly provided herein, any reference (i) to a Contract
(including this Agreement) and all other contractual instruments is a reference
to such Contract or instrument (including all exhibits, schedules, attachments
and appendices thereto) as the same may be amended or otherwise modified from
time to time in accordance with the terms thereof and (ii) to a law is a
reference to all statutory and regulatory provisions consolidating, amending,
replacing, supplementing or interpreting such law.




(c)           If
an Entity has an obligation hereunder to not permit another Person from taking
any action, then such Entity is deemed to have a concurrent obligation to cause
such other Person, to the extent such Entity is capable of exercising control
over the actions of such other Person, to cease taking such action (if
applicable) and to refrain from taking such action.




(d)           The
term “control,” as used with respect to any Person, means the power to direct
the management and policies of such Person, directly or indirectly, whether
through the ownership of voting Securities, by Contract or
otherwise.




ARTICLE
2


GENERAL




2.1         Formation of the
Company . The
Company was formed on the Formation Date as a limited liability company under
the Act.




2.2         Name . The
name of the Company and under which the business of the Company is to be
conducted is “Phusion Laboratories, LLC.” The Company may conduct business under
one or more fictitious names, in accordance with the Act and as Approved by the
Board.




2.3         Purpose and
Powers . The
purpose of the Company is to conduct the Business, to engage in any activities
necessary, customary, convenient or incidental thereto and to engage in any
other lawful acts Approved by the Board that a Delaware limited liability
company is permitted to engage in under the Act.




2.4         Principal Place of
Business . The
Company’s principal place of business will be at such place or places as
Approved from time to time by the Board. The Company may have other places of
business as Approved from time to time by the Board.




2.5         Term of the
Company . The
Company commenced its existence on the Formation Date and will continue
perpetually until terminated as a result of the dissolution and winding up of
the Company in accordance with Article 19.




2.6         Statutory
Compliance.




(a)           The
Certificate of Formation has been executed and filed with the Delaware Secretary
of State. Any Manager or Officer, as an “authorized person” within the meaning
of the Act, is hereby authorized in such capacity, at any time that the Board
has Approved and the applicable Members have approved an amendment to the
Certificate of Formation, in accordance with the terms hereof, to execute,
deliver and file such amendment in accordance with the Act.


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(b)           The
Company shall continuously maintain a registered office and a designated and
duly qualified agent for service of process for the Company in the State of
Delaware. The address of the registered office in Delaware as of the Formation
Date is 2711 Centerville Road, Suite 400, City of Wilmington, County of New
Castle, State of Delaware 19808 and the Company’s registered agent for service
of process at that address as of the Formation Date is Corporation Service
Company.




(c)           The
Company shall qualify to do business in any jurisdiction in which it is required
to do so under the laws of such jurisdiction.




2.7         Nature of
Agreement .  This
Agreement constitutes a “limited liability company agreement,” as defined under
the Act.




ARTICLE
3


ANNUAL
PLANS




3.1         Adoption of Annual Plans
(PSI Parent) . No
later than December 15 of each year, the Parties shall prepare and agree
upon a budget and an operating plan for the Company for the immediately
following Fiscal Year (each such plan, an “Annual Plan”) setting
forth with respect to such Fiscal Year, among other things, (a)  projected
expenses and capital expenditures, (b) projected cash requirements, loan
commitments and Capital Contribution requirements, (c) projected sources
and uses of funds, and (d) projected distributions. The Parties shall
cooperate to agree upon and prepare the Annual Plan for the remainder of the
Fiscal Year ending December 31, 2010 on or before
May 15, 2010.




3.2         Amendments to Annual Plans
(PSI Parent) . From
time to time during a Fiscal year, the Parties shall review, and, as necessary,
modify, the Annual Plan for such Fiscal Year. An Annual Plan may from time to
time be amended upon the consent of the Company and each Member.




3.3         Company Operations (PSI
Parent) . The
Company shall conduct its operations, and the Members shall cause the Company to
conduct its operations, as closely as possible, in accordance with and otherwise
consistent with the Annual Plan then in effect.




ARTICLE
4


COMMERCIALIZATION
OF PRODUCTS




4.1         Selection of OTC Drugs and
Product Class for Commercialization (PSI Parent).




(a)           General. Subject to
the terms hereof, the Company shall Commercialize Proposed Products.The Parties shall follow the
process set forth in Sections 4.1(b)
through (d)
with respect to the selection of an OTC Drug and/or Product Class for
commercialization.




(b)           Cooperation to Select
Proposed Products for Commercialization. The Parties shall cooperate to
indentify and jointly select OTC Drugs and/or products falling within the
Product Class to be potentially Commercialized (any such OTC Drug or product
falling within the Product Class so selected, a “Proposed Product”).
Factors relevant to selecting a Proposed Product include (i) the ability of
the PSI and PSI Parent, and the costs, to reasonably research, develop, test and
formulate the Proposed Product and the Developed Product with respect to such
Proposed Product, and (ii) the ability of the Company, and the costs, to
reasonably market, advertise, package, sell and distribute the Developed
Product  arising from such Proposed Product.


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(c)          PSI Testing, Etc. of
Proposed Products. With respect to each Proposed Product, PSI Parent
shall, at their own expense, identify the unique characteristics and potential
product claims that are anticipated to be applicable to any Developed Product
with respect to such Proposed Product. PSI Parent will provide to the Company
its view and advice as to whether a Proposed Product is capable of being
formulated. PSI will formulate and develop the Proposed Product on behalf of the
Company subject to the reasonable abilities and resources of PSI taking into
account the number of employees PSI  has and its own ongoing research.
The Company is responsible for verifying any product claims described in this
Section 4.1(c)
and PSI Parent will not be liable with respect to the verification of any such
product claims. From time to time, and subject to the agreement of the Parties,
the Company may determine to contract with third parties to conduct research on
behalf of the Company, with such research to be supervised by PSI
Parent.




(d)          Approval of Budget for the
Commercialization of Proposed Products.




(i)           If
the Company determines, with respect to a Proposed Product, that there is a
reasonable likelihood that such Proposed Product will be capable of becoming one
or more Developed Products, then the Parties shall seek to agree on a budget for
the commercialization of such Proposed Product in accordance with this Section 4.1(d)
(any such budget, with respect to a given Proposed Product, a “Budget”).




(ii)          Each
Budget must include the following items:




(A)           a
timeline for commercialization of such Proposed Product;




(B)           reasonable
estimates of the Development Costs with respect to such Proposed
Product;




(C)           reasonable
estimates of the Marketing Costs with respect to such Proposed Product;
and




(D)           the
estimated funding requirements of the Parties under Section 4.5(c)(ii)
with respect to such Proposed Product.




(iii)         The
Initial Members may, by mutual agreement, amend, change or otherwise modify or
supplement any Budget they have previously agreed to for the commercialization
of any Proposed Product.


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4.2         Obligations of PSI and PSI
Parent in Connection with the Commercialization of Approved Products (PSI
Parent).




(a)           Research Program. PSI
Parent shall undertake and supervise the Research Program determined by the for
each Approved Product.




(b)           Toxicology and Safety
Data. PSI and PSI Parent shall provide to the Company all toxicology and
safety data available to PSI Parent relating to tocopheryl phosphates, whether
alone or formulated with another ingredient, pertaining to each Approved
Product. Additionally, PSI and PSI Parent shall grant the Company the right to
reference all applicable toxicology and safety data that is or becomes under PSI
Parent’s control.




(c)           Supply the Tocopheryl
Phosphate. PSI Parent shall, at its “fully allocated” costs of
manufacturing, supply to the Company the tocopheryl phosphate required in the
manufacture of theproducts marketed by the
Company. For these purposes, PSI Parent’s “fully allocated” costs shall consist
of the following: the direct manufacturing  costs incurred (i.e.,
materials, supplies, labor, factory floor overhead) and shall exclude all PSI
Parent corporate overhead; provided, however, that in no
event shall the price charged by PSI Parent exceed the then-current (i.e., within 90 days before
or after the date of shipping) lowest price charged by PSI Parent or any of its
Affiliates to any third party for the supply of tocopheryl phosphate (excluding
immaterial quantities supplied by PSI Parent or any of its Affiliates to third
parties for strategic purposes).




(d)           Third-Party Supplier of
Tocopheryl Phosphate. If (i) PSI Parent is unable to supply to the
Company cGMP-grade tocopheryl phosphates to formulate and commercially
manufacture any Product or (ii) the Company or Quigley is able to find a
reputable third-party manufacturer that is able to supply to the Company
cGMP-grade tocopheryl phosphates at prices more favorable than the price charged
by PSI Parent, then PSI Parent shall grant to a third-party manufacturer
nominated by the Company or Quigley a fully paid-up license to practice PSI
Parent’s patents relating to its manufacturing process, provided that such third
party agrees to produce only sufficient quantities of tocopheryl phosphate as
may be required for use in formulation and commercial manufacturing of Developed
Products for the Company.




(e)           Implementation of
Development Program. PSI and PSI Parent shall design and implement a
Development Program that will be required to sell any products that the Company
has determined to bring or attempt to bring to market.




(f)           Patents and Patent
Applications. PSI and PSI Parent shall manage the filing and prosecutions
of any patents or applications for patents included in the Program Patents
pursuant to such budget as the Parties have agreed upon. The Company shall bear
all out of pocket costs incurred by the Parties in connection with such patent
filing, application and prosecution. In the event a Member has incurred out of
pocket costs, such costs will be reimbursed in accordance with Section 4.6(c).




(g)           Office and Lab Space.
PSI Parent shall make available to the Company at no charge reasonable office
and lab space at its facility in Melbourne, Australia.


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(h)           Maintenance of
Records. PSI Parent shall keep proper records relating to the costs it
incurs in connection with the manufacture of tocopheryl phosphate for use in
Developed Products. Each of PSI and PSI Parent shall keep proper records
relating to any other costs for which it seeks recovery pursuant hereto and
shall report and account to the Company from time to time with respect to the
financial information relevant hereto.  Quigley or its representatives
may enter any premises occupied by PSI and/or PSI Parent at all reasonable times
to examine and take copies of the books, records and documents relating thereto
provided that such information shall only be used to verify the accountings
required pursuant hereto.




4.3         Quigley’s Obligations in
Connection with the Commercialization of Developed Products (PSI
Parent).




(a)           Marketing of Developed
Products. Quigley (either itself or through its Affiliates) shall manage
the marketing, promotion, advertising and sale of Developed Products in the
United States on behalf of the Company. The Company may grant third-party
distribution rights and marketing rights in the United States and elsewhere as
approved by the Board.




(b)           Office and Warehouse
Space. Quigley shall make available to the Company at no charge
reasonable office and warehouse space at its facility in Doylestown,
Pennsylvania: provided, however, that the
Company will not be entitled to use of more than 20% of the warehouse
space.




(c)           Sale and Customer
Information. Quigley shall assist the Company in maintaining accurate
current sales information and statistics relating to the sales (dollar values
and quantity volumes) of the Developed Products to Customers (individually and
in aggregate) and a current list of all Customers. Except as required by law,
both Quigley and PSI shall keep such Customer information confidential and shall
use such information for any purpose other than to enforce this
Agreement.




4.4         Reputation of Products (PSI
Parent). The Parties shall cooperate to establish and maintain the
reputation of Developed Products.




4.5         Funding (PSI
Parent).




(a)           Development Costs.
Unless both Quigley and PSI agree to the contrary in writing, each Budget with
respect to an Approved Product shall provide that, with respect to the
Development Costs with respect to such Approved Product, (i) Quigley shall
fund the first $100,000 of such Development Costs and one-half of such
Development Costs in excess of $100,000 (in each case by contributing such
amount to the Company as a Capital Contribution), and (ii) PSI shall fund
one-half of such Development Costs in excess of $100,000 (by contributing such
amount to the Company as a Capital Contribution). Each Budget for Development
Costs will specify the estimated date when funding shall be required, and the
Members shall fund their respective amounts as and when specified in the agreed
Budget.


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(b)           Marketing Costs. Each
Budget with respect to an Approved Product shall set forth an agreed Budget for
Marketing Costs. Unless both Quigley and PSI agree to the contrary in writing,
Quigley shall fund the first $500,000 of the agreed Marketing Costs for each
Approved Product (by contributing such amount to the Company as a Capital
Contribution). Each Budget for Marketing Costs will specify the estimated date
when funding shall be required, and the Members shall fund their respective
amounts as and when specified in the agreed Budget.




(c)           Funding
Obligations.




(i)           Not
more than 30 nor less than 10 days prior to the end of each Fiscal Quarter, the
Company shall provide the Members with a written notice (a “Funding Notice”)
setting forth with respect to each Approved Product or (if such Approved Product
has become Developed Product) Developed Product: (A) a good faith estimate
of the anticipated Development Costs (if any) that will be required with respect
to such Approved Product or Developed Product, respectively, for such Fiscal
Quarter, and the amount of such anticipated Development Costs that each Member
must fund (which amount must be consistent with the funding requirements
contemplated by Section 4.5(a));
and (B) a good faith estimate of the anticipated Marketing Costs (if any)
that will be required with respect to such Approved Product or Developed
Product, respectively, for such Fiscal Quarter, and the amount of such
anticipated Marketing Costs that each Member must fund (which amount must be
consistent with the funding requirements contemplated by Section 4.5(b)).




(ii)          On
or before the first day of each Fiscal Quarter, each Member shall contribute its
Funding Amount with respect to such Fiscal Quarter to the Company as a Capital
Contribution in respect of the Units held by such Member at the time of such
Capital Contribution.




4.6           Reimbursement of Expenses
(PSI Parent).




(a)           Quigley Qualified
Expenses. Promptly after Quigley presents to the Company a reasonably
detailed invoice for any Quigley Qualified Expenses, the Company shall pay
Quigley, as reimbursement therefor, the amount of such Quigley Qualified
Expenses.




(b)           PSI Qualified
Expenses. Promptly after PSI presents to the Company a reasonably
detailed invoice for any PSI Qualified Expenses, the Company shall pay PSI, as
reimbursement therefor, the amount of such PSI Qualified Expenses.




(c)           Expenditures Related to
Patents.  The Members will be jointly responsible for paying
the expenses related to the filing and prosecutions of any patents or
applications for patents included in the Program Patents in proportion to the
respective number of Units they hold. A Member shall reimburse another Member
for its ratable share of such expenses promptly after the Member incurring such
expense presents the reimbursing Member with a reasonably detailed invoice
therefor (after taking into account any such expenses that the Member providing
such invoice owes such reimbursing Member pursuant to this Section 4.6(c)).


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(d)           The
Parties hereby acknowledge that the payroll and corporate overhead expenses of
the employees of the Members who are providing services to the Company shall not
be considered an expense which may be charged to or reimbursed by the Company;
provided, however, that where
an employee of a Member has devoted a disproportionate amount of time or made a
disproportionate contribution to the Company, the Members may agree to reimburse
or the Member making such contribution.




4.7           Cap on Quigley Funding
Obligations (PSI Parent) .
Notwithstanding anything to the contrary herein, Quigley is not required to fund
and/or pay in excess of Two Million Dollars ($2,000,000) in the aggregate
pursuant to this Article 4. Any
funding required above such amount is to be provided, as the Parties may
mutually agree, by reinvestment of operating income, by third-party investment
in the Company, by debt financing, by out-licensing, or as the Parties may
otherwise agree from time to time.




4.8           Intellectual Property
Ownership .
Ownership rights with respect to the Intellectual Property (including Program
Patents) developed by or on behalf of any Company Entity are as set forth in the
License Agreement.




ARTICLE
5


ADMISSION
OF MEMBERS AND CAPITAL ACCOUNTS




5.1           Initial Members and Initial
Capital Contributions(PSI
Parent) .




(a)           Each
Party acknowledges that: (i) on the Effective Date, Quigley contributed to
the Company, as an initial Capital Contribution, (A) all of its rights and
obligations under the License Agreement, pursuant to the Assignment and
Assumption Agreement, and (B) $500,000 in cash; and (ii) as of the
Effective Date, PSI has not made, and on the Effective Date PSI did not make,
any Capital Contributions to the Company.




(b)           The
Company hereby issues 1,000 Units to each Initial Member.




5.2           Units . The
Member Schedule sets forth the respective names, addresses, initial Capital
Contributions, and the number of Units held by each Member. Each Member
acknowledges that each Member’s aggregate initial Capital Contributions as set
forth in the Member Schedule represent the amount of cash and the Fair Market
Value of property other than cash that such Member has contributed to the
Company in the aggregate as of the Effective Date.




5.3           Capital
Accounts.




(a)           The
Company shall establish and maintain a separate Capital Account for each Member
in accordance with Regulations Section 1.704-1(b)(2)(iv) and in accordance
with the following provisions:


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(i)           To
each Member’s Capital Account there shall be credited such Member’s Capital
Contributions, such Member’s allocable share of Net Profits, any items in the
nature of income or gain that are specially allocated to such Member under Section 10.2,
and the amount of any liabilities of the Company that are assumed by such Member
(or liabilities that are secured by any Company assets distributed to such
Member). The principal amount of a promissory note that is not readily traded on
an established securities market and that is contributed to the Company by the
maker of such note (or a Member related to the maker of such note within the
meaning of Regulations Section 1.704-1(b)(ii)(c)) shall not be credited to
the Capital Account of any Member until the Company makes a taxable disposition
of such note or until (and to the extent) principal payments are made on such
note, all in accordance with Regulations
Section 1.704-1(b)(2)(iv)(d)(2).




(ii)          To
each Member’s Capital Account there shall be debited the amount of cash and the
Gross Asset Value of any Company assets distributed to such Member pursuant to
any provision hereof (net of liabilities secured by such distributed Company
assets that such Member is considered to assume or take subject to under Code
Section 752), such Member’s allocable share of Net Losses, any items in the
nature of expenses or losses that are specially allocated to such Member under
Section 10.2,
and the amount of any liabilities of such Member that are assumed by the Company
(or liabilities that are secured by any property contributed by such Member to
the Company).




(iii)         If
any interest in the Company is transferred in accordance with the terms hereof,
then the transferee shall succeed to the Capital Account of the transferor to
the extent it relates to the transferred interest. In the case of a sale or
exchange of an interest in the Company at a time when an election under Code
Section 754 is in effect, the Capital Account of the transferee Member
shall not be adjusted to reflect the adjustments to the adjusted tax basis of
Company assets required under Code Sections 754 and 743, except as
otherwise required or permitted by Regulations
Section 1.704-1(b)(2)(iv)(m).




(iv)        In
determining the amount of any liability for purposes of Sections 5.3(a)(i)
and (ii), there
shall be taken into account Code Section 752(c), and any other applicable
provisions of the Code.




(b)           The
foregoing provisions of this Section 5.3 and
the other provisions hereof relating to the maintenance of Capital Accounts are
intended to comply with Regulations Sections 1.704-1(b) and 1.704-2 and
shall be interpreted and applied in a manner consistent with such
Regulations.




(c)           If
the Board determines that it is prudent to modify the manner in which any debits
or credits are made to the Capital Accounts (including debits or credits
relating to liabilities that are secured by contributed or distributed property
or that are assumed by the Company or any Members), the Board may make such
modification, provided that it is not likely to have a material effect on the
amounts distributed to any Person pursuant to Section 19.5
upon the dissolution of the Company.


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(d)           The
Board also shall (i) make any adjustments that are necessary or appropriate
to maintain equality between the Capital Accounts of the Members and the amount
of capital reflected on the Company’s balance sheet, as computed for book
purposes, in accordance with Regulations Section 1.704-1(b)(2)(iv)(q) and
(ii) make any appropriate modifications in the event unanticipated events
might otherwise cause this Agreement not to comply with Regulations
Section 1.704-1(b).




ARTICLE
6


ADDITIONAL
CAPITAL, CONTRIBUTIONS, RETURN OF CAPITAL


CONTRIBUTIONS
AND MEMBER LOANS




6.1           Additional Capital
Contributions . Except
as provided in Section 4.5, no
Member is hereby required to contribute additional capital to the Company.
Subject the Approval of the Board, the Company may issue additional Units on
such terms as are Approved by the Board, which may involve the issuance to
existing Members or other Persons of Units in one or more classes or series with
such rights, powers and duties as are Approved by the Board. If such issuance
was effected in accordance with the terms hereof and the Person to which such
Units were issued signs a Joinder Agreement, then the Person to which such Units
were issued will thereby be deemed admitted as a Member with respect to such
Units, the Member Schedule will thereby be deemed amended to reflect the name,
address and Units of such Member, and the Company will thereby be permitted to
insert a copy of Member Schedule that reflects such amendments. All Capital
Contributions made to the Company in connection with the issuance of any
additional Units to any Person pursuant to this Section 6.1 are to be
credited to the Capital Account of such Person as and when such Capital
Contribution is made, as reflected in the records of the Company. As a result of
such Capital Contributions and the admission of each Person as a Member, the
Board will have the right, but not the obligation, to adjust the respective
Capital Accounts of the Members in accordance with the definition of Gross Asset
Value and Regulations Section 1.704-1(b)(2)(iv)(f). None of the Members have any
pre-emptive rights with respect to any issuances of Units.




6.2           Return of Member Capital
Contributions . Except
as otherwise provided herein: (a) no Member shall demand, and no Member
will be entitled to receive, a return of, or interest on, its Capital
Contributions or Capital Account with respect to the Company; (b) no Member
shall withdraw any portion of its Capital Contributions or receive any
distributions from the Company as a return of capital on account of such Capital
Contributions; and (c) the Company shall not redeem or repurchase the Units
of any Member.




6.3           Member
Loans . No
Member will be required to make, and each Member shall not make, any loans or
otherwise lend any funds to the Company, except as otherwise provided herein or
as otherwise Approved by the Board. Notwithstanding the foregoing, a Member may
provide loans to or for the benefit of the Company from time to time on arm’s
length, commercially reasonable terms and conditions Approved by the Board. Each
Member loan will represent a debt of the Company payable or collectible solely
from the Company Assets in accordance with the terms and conditions upon which
such loan was made. The Company shall repay all permitted Member loans
(a) in accordance with any documents and instruments evidencing such loans
or (b) absent any such documents or instruments, prior to making any
distributions (other than Tax Distributions pursuant to Section 11.2).




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6.4           No Liability of Member for
Debts and Obligations of the Company . Except
as otherwise required by any non-waivable provision of the Act or other
applicable Law, or as provided in any guaranty or other form of credit
enhancement by one or more Members, or as set forth in any other written
instrument or document signed on or after the Effective Date by one or more of
the Members: (a) no Member will be personally liable for any debt,
liability or other obligation of the Company; and (b) no Member will, by
virtue of its ownership of Units, have any liability to any Person in excess of
(i) the aggregate amount of such Member’s Capital Contributions to the
Company, and (ii) without duplication, its share of any Company Assets and
undistributed profits of the Company.




6.5           Registered
Owner . The
Company will be entitled to treat a Member as the owner of the Units registered
in such Member’s name on the books and records of the Company for all purposes,
and, accordingly, will not be bound to recognize any equitable or other claim to
or interest in such Units on the part of any other Person, regardless of whether
the Company has actual or other notice thereof.




ARTICLE
7


MEMBERS




7.1           No Management By
Members . Except
as expressly set forth in the Act, this Agreement or the Company’s other
Organizational Documents, no Member, in its capacity as a Member, is entitled to
take any part in the control or management of the Business or have any authority
or power to act for or on behalf of the Company.




7.2           Limited
Liability . No
Member, in its capacity as a Member, will be liable to the Company, any creditor
of the Company or any other Person for any Liabilities of the Company, whether
arising in contract, tort or otherwise, except as specifically set forth herein
or as otherwise agreed to in writing by such Member. No Member will be liable to
the Company, any other Member, any creditor of the Company or any other Person
for the repayment of amounts received from the Company in its capacity as
Member. The failure of the Board to observe any formalities or requirements
relating to the exercise of its powers or management of its business or affairs
hereunder, the Company’s other Organizational Documents or the Act will not be
grounds for imposing personal liability on the Members or the Managers for
Liabilities of the Company, whether arising in contract, tort or
otherwise.




7.3           Admission of
Members . No
Person will be admitted to the Company as a Member except in accordance with
Section 6.1 (in
the case of Persons obtaining Units directly from the Company) or Section 14.6 (in
the case of transferees of a permitted Transfer of Units from another Person).
No admission of a Member will operate, by virtue thereof, to cause the
dissolution of the Company. Any admission that is purportedly effected other
than in accordance with this Agreement will be null and void ab initio. Upon admission as
a Member in accordance with the terms hereof, a Person will have the rights,
liabilities and obligations of a Member as provided hereunder with respect to
the Units held by such Person.


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7.4           Withdrawal or
Resignation . Except
as otherwise specifically set forth in Section 14.7, no
Member is or will be entitled to retire or withdraw from being a Member without
the Approval of the Board. No withdrawal of a Member will operate, by virtue
thereof, to cause the dissolution of the Company. Any withdrawal that is
purportedly effected other than in accordance with this Agreement will be null
and voidab initio. If
any Member withdraws from the Company without the Approval of the Board (other
than pursuant to Section 14.7),
such Member will not be entitled to receive from the Company any payment as a
result of such withdrawal, unless otherwise Approved by the Board.




7.5           Meetings.




(a)           General. Member
Meetings that have been called in accordance with Section 7.5(b)
or (c) may be
held at any place within or outside Delaware, or by remote communication, as a
Majority Vote of the Members may from time to time fix, or as specified in the
notice or waivers of notice thereof. Any one or more Members may participate in
a Member Meeting by means of telephone communications, video conference or
similar communications equipment by means of which all persons participating in
such Member Meeting can hear each other at the same time. Participation by such
means constitutes presence in person at any such Member Meeting.




(b)           Regular Member
Meetings. Unless otherwise determined by a Majority Vote of the Members,
the Members shall hold an annual Member Meeting each year at the time and place
fixed by the Board.




(c)           Special Member
Meetings. Special Member Meetings are to be held whenever called by, and
at such time and place as fixed by, a Majority Vote of the Members of any
Initial Member.




(d)           Notice. For a Member
Meeting to be duly convened, notice of the time and place of such Member Meeting
must be given at least four days prior to such Member Meeting pursuant to either
oral or written notice to all of the Members (if such Member Meeting is to be
held in person) or at least 72 hours prior to such Member Meeting pursuant to
oral or written notice to all of the Members (if such Member Meeting is to be
held by telephone communications, video conference or similar communications
equipment), or (in either case) upon such shorter notice as may be approved by
all of the Members. The business to be transacted at, or the purpose of, a
Member Meeting must be specified in the notice of such Member Meeting or waiver
of notice thereof. Notice provided to the applicable email addresses specified
in the Member Schedule is hereby deemed to be effective notice for purposes of
this Section 7.5(d).




(e)           Waiver of Notice.
Attendance by a Member at a Member Meeting will thereby constitute such Member’s
waiver of notice of such Member Meeting, unless such Member attends such Member
Meeting for the express purpose of objecting, and does so object at the
beginning of such Member Meeting, to the transaction of any business at such
Member Meeting on the ground that such Member Meeting was not duly called or
convened.




(f)           Adjourned and Rescheduled
Meetings. If a Quorum is not present at a duly called Member Meeting,
then the Members present at such Member Meeting may adjourn the Member Meeting
from time to time until a Quorum is present. Members not present at any Member
Meeting that has been adjourned and rescheduled must be given notice of the
rescheduled Member Meeting in accordance with Section 7.5(d)
or waive such notice in accordance with Section 7.5(e).


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(g)           Member Meeting
Observer. The Secretary (if any) or the Assistant Secretary (if any), or,
in his or her absence, such individual as may be determined by the Board, is
entitled to be present at each Member Meeting for the purpose of recording the
events of such Member Meeting, including the actions taken by the Members
thereat. Notice of each Member Meeting (including any adjournment and
rescheduling thereof) and the materials to be provided thereat are to be
provided to both the Secretary (if any) and the Assistant Secretary (if any) in
the same manner as notice of such Member Meeting and such materials are to be
provided to the Members. Neither the presence of the Secretary nor the presence
of the Assistant Secretary at a Member Meeting is required in order for such
Member Meeting to be duly held, and neither the presence of the Secretary nor
the presence of the Assistant Secretary at a Member Meeting is required in order
for the Members to take valid action at such Member Meeting.




7.6           Action by the
Members.




(a)           Quorum. A Quorum will
constitute a quorum for the purpose of transacting business and taking action at
a Member Meeting.




(b)           Voting. Each Unit is
entitled to one vote in respect of matters to be voted on by the Members. If a
Quorum is present (either in person or by proxy) at a Member Meeting called in
accordance with the terms hereof, then the Majority Vote of the Members will be
the act of the Members, unless with respect to a given action of the Members a
greater percentage is required by Law, this Agreement or any of the Company’s
other Organizational Documents.




(c)           Actions Requiring a Majority
Vote of the Members. None of the following actions is to be taken by or
on behalf of any Company Entity (other than any action that such Company Entity
is otherwise expressly entitled to take pursuant hereto without consent or upon
requisite Member consent) without a Majority Vote of the Members:




(i)           amending,
altering or changing the rights or preferences of the Members;




(ii)          amending
any Organizational Document of any Company Entity;




(iii)         changing
the overall business purpose of the Company;




(iv)        reorganizing
or recapitalizing any Company Entity, or converting the Company into an entity
other than a Delaware limited liability company;




(v)         issuing
any equity Securities or any other Security convertible into, exercisable for or
exchangeable for any equity Securities, including any bona fide equity
financing, Initial Public Offering or any registration of
Securities;


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(vi)        increasing
or decreasing the size of the Board;




(vii)       entering
into any transaction or series of related transactions pursuant to which the
aggregate consideration to be paid by Company Entities is in excess of $50,000,
except pursuant to an agreed Budget;




(viii)      incurring
any Indebtedness, other than trade debt incurred in the ordinary course of
business and other than Indebtedness incurred pursuant to an agreed
Budget;




(ix)         creating,
incurring, assuming or suffering to exist any Liens on Company Entity
Assets;




(x)          signing
a definitive agreement with respect to or consummating any transaction
(including any merger, consolidation or amalgamation of the Company) that
results, or that would upon consummation result, in a change in control of the
Company;




(xi)         selling,
transferring or otherwise disposing in any transaction or series of related
transactions (A) all or substantially all of the Company Entity Assets, or
(B) any material Company Entity Asset;




(xii)        consummating,
or entering into a Contract that contemplates the consummation of, a Pre-Initial
Public Offering Transaction.




(xiii)       entering
into, amending, modifying, restating or supplementing any Contract, transaction
or arrangement (including those involving the payment of any fees or
compensation by any Company Entity) with any Company Entity’s officers,
directors, employees, shareholders (or other equity holders) or Affiliates, with
any member of the Immediate Family of any of the foregoing or with any Entity in
which any such Person owns a beneficial interest;




(xiv)       taking
any action that is contrary to the terms and conditions set forth in the License
Agreement;




(xv)        making
any direct or indirect loans or advances to, Guarantees for the benefit of, or
investments in any Person;




(xvi)       approving
and implementing Annual Plans and approving and implementing any Substantial
Modification thereto;




(xvii)      incurring
an expense or series of related expenses greater than $50,000 (except pursuant
to an agreed Budget and except for making reimbursement payments in accordance
with Section 4.6);




(xviii)     hiring
or terminating the employment of an employee of any Company Entity who has, at
such time, a salary that is greater than $50,000 per year or who is other than
an at-will employee of such Company Entity;


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(xix)       receiving
a Capital Contribution, other than pursuant to and in accordance with Section 4.5(c)(ii);




(xx)        initiating,
settling or compromising any Suit, other than a Suit against any Member, PSI
Parent, or any of their respective Affiliates; and




(xxi)       issuing
of a press release or other broadly disseminated public disclosure with respect
to any Company Entity or the Business (except as contemplated by the
Contribution Agreement and except as any Company Entity or any Member is
required to in accordance with any applicable laws or regulations, including any
securities laws to which such Company Entity or such Member, respectively, is
subject.




(d)           Action By Written
Consent. Any action that the Members are required or permitted to take
may be taken without a Member Meeting if Members, the affirmative votes of which
would be sufficient to take such action at a duly held Member Meeting at which
all Members were present and voted, consent thereto in writing (or by electronic
transmission) to the adoption of a resolution authorizing such action. The
resolution and the written consents thereto by the applicable Members are to be
filed with the minutes of the proceedings of the Members.




ARTICLE
8


BOARD
OF MANAGERS




8.1           Establishment of
Board . A board
of managers of the Company (the “Board”) comprised of
natural persons (the “Managers”) having the
powers and duties set forth herein is hereby established.




8.2           Powers .




(a)           The
Board has general power to control and manage the affairs and Company Assets in
accordance with, and subject to the provisions of, the Act, the Certificate of
Formation and this Agreement. Each Manager is hereby designated as a “manager”
(as that term is defined in the Act) of the Company, but no Manager has any
rights or powers beyond the rights and powers granted to such Manager in any of
the Company’s Organizational Documents.




(b)           Except
with respect to actions requiring (either pursuant to applicable law or the
Company’s Organizational Documents) Board Approval or approval of all or some of
the Members (including approval of a Majority Vote of the Members as
contemplated by Section 7.6(c)),
a Manager may take any action on behalf of any Company Entity that (i) is
consistent with the Annual Plan in effect at the time of such action and/or
(ii) has been specifically Approved by the Board or by a Majority Vote of
the Members.




8.3           Qualifications, Number and
Appointment.




(a)           A
Manager must be a natural person of at least 18 years of age. A Manager need not
be a resident of the State of Delaware.


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(b)           The
Board is to consist of four Managers in total, comprised as
follows:




(i)           Quigley
will be entitled to designate (in its sole and absolute discretion), by
providing written notice thereof to the Company, two individuals to serve as
Managers (each such Manager, collectively with any replacement of or successor
to such Manager, a “Quigley Designated
Manager”), and, upon such designation, such individuals will thereby be
appointed as Managers;




(ii)          PSI
will be entitled to designate (in its sole and absolute discretion), by
providing written notice thereof to the Company, two individuals to serve as
Managers (each such Manager, collectively with any replacement of or successor
to such Manager, a “PSI Designated
Manager”), and, upon such designation, such individuals will thereby be
appointed as Managers.




(c)           Each
Member, in its capacity as such, shall from time to time take such action,
including voting or causing to be voted all Units owned or controlled by such
Member, as may be necessary to cause the Company to be managed at all times by
the Board, comprised as set forth in Section 8.3(b).




(d)           Each
of the initial Managers is set forth in Exhibit B.




8.4           Term . Each
Manager will serve as a Manager until the earliest of such Manager’s death,
resignation or removal.




8.5           Removal .
Quigley, and only Quigley, is entitled to remove (in its sole and absolute
discretion) any Quigley Designated Manager by providing notice thereof to the
Company and, upon providing such notice, such Manager will thereby be removed as
a Manager. PSI, and only PSI, is entitled to remove (in its sole and absolute
discretion) any PSI Designated Manager by providing notice thereof to the
Company, and, upon providing such notice, such Manager will thereby be removed
as a Manager.




8.6           Resignation . A
Manager may resign at any time by giving written notice thereof to the Company.
Any such resignation will take effect at the time of the Company’s receipt
thereof or any later effective time specified therein, and, unless otherwise
specified therein, the acceptance of the resignation will not be necessary to
make it effective.




8.7           Vacancies .
Quigley, and only Quigley, will be entitled to designate (in its sole and
absolute discretion) a replacement Manager to fill any vacancy in the manager
position previously held by a Quigley Designated Manager that is caused by the
resignation, death or removal of such Quigley Designated Manager. PSI, and only
PSI, will be entitled to designate (in its sole and absolute discretion) a
replacement Manager to fill any vacancy in the manager position previously held
by a PSI Designated Manager that is caused by the resignation, death or removal
of such PSI Designated Manager.




8.8           Chairman; Vice
Chairman . The
Board may, from time to time, designate (by Majority Vote of the Board) a
Chairman of the Board and a Vice Chairman of the Board.


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8.9           Meetings.




(a)           General. Board
Meetings that have been called in accordance with Section 8.9(b)
or (c) may be
held at any place within or outside Delaware, or by remote communication, as the
Board may from time to time fix, or as specified in the notice or waivers of
notice thereof. The Chairman of Board is to preside over Board Meetings. In the
absence of the Chairman of Board at a Board Meeting, the Vice Chairman is to
preside over such Board Meeting. In the absence of the Chairman of the Board and
the Vice Chairman of the Board at a Board Meeting, the Board is to appoint a
Manager in attendance at such Board Meeting to preside over such Board Meeting.
Any one or more Managers may participate in a Board Meeting by means of a
telephone communications, video conference or similar communications equipment
by means of which all persons participating in such Board Meeting can hear each
other at the same time. Participation by such means constitutes presence in
person at any such Board Meeting.




(b)           Regular Board
Meetings. Unless otherwise determined by the Board, the Board is to hold
an annual Board Meeting each year at the time and place fixed by the Board. The
Board is to hold other regular Board Meetings on a quarterly basis and the Board
will set the date, time and place of such other regular Board Meetings at the
annual Board Meeting that is closest in time prior to such other regular Board
Meetings.




(c)           Special Board
Meetings. Special Board Meetings are to be held whenever called by any
two Managers at such time and place as fixed by the Managers calling the
meeting.




(d)           Notice. For a Board
Meeting to be duly convened, notice of the time and place of a Board Meeting
must be given at least two days prior to such Board Meeting pursuant to either
oral or written notice to all of the Managers, or upon such shorter notice as
may be approved by all of the Managers then in office. The business to be
transacted at, or the purpose of, a Board Meeting must be specified in the
notice of such Board Meeting or waiver of notice thereof. Notice provided to the
applicable email addresses specified in the Member Schedule is hereby deemed to
be effective notice for purposes of providing notice pursuant to this Section 8.9(d)
to a director designated by a Member.




(e)           Waiver of Notice.
Attendance of a Manager at a Board Meeting will thereby constitute such
Manager’s waiver of notice of such Board Meeting, unless such Manager attends
such Board Meeting for the express purpose of objecting, and does so object at
the beginning of such Board Meeting, to the transaction of any business at such
Board Meeting on the ground that such Board Meeting was not duly called or
convened.




(f)           Adjourned and Rescheduled
Meetings. If a Quorum is not present at a duly called Board Meeting, then
the Managers present at such Board Meeting may adjourn the Board Meeting from
time to time until a Quorum is present. Managers not present at any Board
Meeting that has been adjourned and rescheduled must be given notice of the
rescheduled Board Meeting in accordance with Section 8.9(d)
or waive such notice in accordance with Section 8.9(e).


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(g)           Board Meeting
Observer. The Secretary, or, in his or her absence, the Assistant
Secretary, is entitled to be present at each Board Meeting for the purpose of
recording the events of such Board Meeting, including the actions taken by the
Board thereat. Notice of each Board Meeting (including any adjournment and
rescheduling thereof) and the materials to be provided thereat are to be
provided to both the Secretary and the Assistant Secretary in the same manner as
notice of such Board Meeting and such materials are to be provided to the
Managers. Neither the presence of the Secretary nor the presence of the
Assistant Secretary at a Board Meeting is required in order for such Board
Meeting to be duly held, and neither the presence of the Secretary nor the
presence of the Assistant Secretary at a Board Meeting is required in order for
the Board to take valid action at such Board Meeting.




8.10         Action by the
Board.




(a)           Quorum. A Quorum will
constitute a quorum for the purpose of transacting business and taking action at
a Board Meeting.




(b)           Voting.




(i)           Subject
to Sections 8.10(b)(ii)
and (iii), each
Manager is entitled to one vote in respect of matters to be voted on by the
Board.




(ii)          If
at a given time there is only one Quigley Designated Manager serving on the
Board, then such Quigley Designated Manager will be entitled (in addition to the
one vote to which such Quigley Designated Manager is entitled pursuant to Section 8.10(b)(i))
to an additional vote in his or her capacity as a Manager.




(iii)         If
at a given time there is only one PSI Designated Manager serving on the Board,
then such PSI Designated Manager will be entitled (in addition to the one vote
to which such PSI Designated Manager is entitled pursuant to Section 8.10(b)(i))
to an additional vote in his or her capacity as a Manager.




(iv)        If
a Quorum is present (either in person or by proxy) at a Board Meeting called in
accordance with the terms hereof, then the Majority Vote of the Board will be
the act of the Board, unless, with respect to a given action of the Board, a
greater percentage is required by Law or any of the Company’s Organizational
Documents.




(c)           Action By Written
Consent. Any action that the Board is required or permitted to take may
be taken without a Board Meeting if all Managers presently serving on the Board
consent thereto in writing (or by electronic transmission) to the adoption of a
resolution authorizing such action. The resolution and the written consents
thereto by the applicable Managers are to be filed with the minutes of the
proceedings of the Board.


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8.11         Compensation . A
Manager, in his or her capacity as such, is not entitled to receive any
compensation for such Manager’s services, except as otherwise determined by the
Board; provided, however, that the
Company will reimburse a Manager for reasonable actual out-of-pocket expenses of
attendance, if any, incurred by such Manager in respect of his or her attendance
at each Board Meeting; provided, that
nothing contained herein is to be construed to preclude or limit any Manager
from serving any Company Entity in any other capacity and receiving compensation
for such service.




8.12         Committees . The
Board may from time to time, pursuant to a resolution of the Board that has been
Approved by the Board, create such committees of the Board that are composed of
such Managers and that have such authority and responsibilities as set forth in
such resolution.




ARTICLE
9


OFFICERS




9.1           Qualifications and
Appointment.




(a)           Qualifications. An
Officer need not be a Member or a Manager. Any number of titles may be held by
the same Officer.




(b)           Co-CEOs.




(i)           Quigley
will be entitled to designate (in its sole and absolute discretion), by
providing written notice thereof to the Company, an individual to serve as a
co-chief executive officer (such individual, collectively with any replacement
of or successor to such individual, the “Quigley Designated
CEO”), and, upon such designation, such individual will thereby be
appointed as a CEO. Quigley hereby designates Ted Karkus as the initial Quigley
Designated CEO.




(ii)          PSI
will be entitled to designate (in its sole and absolute discretion), by
providing written notice thereof to the Company, an individual to serve as a
co-chief executive officer (such individual, collectively with any replacement
of or successor to such individual, the “PSI Designated CEO”),
and, upon such designation, such individual will thereby be appointed as a CEO.
PSI hereby designates Harry Rosen as the initial PSI Designated
CEO.




(c)           Officers Other than the
CEOs. The Board is entitled to appoint Officers and delegate to such
Officers such authority and duties, and assign such titles to such Officers as
it determines in its sole and absolute discretion.




(d)           Initial Officers (PSI
Parent). The Parties acknowledge that, other than the CEOs, as of the
Effective Date, there are no Officers.




9.2           Authority of
Officers.




(a)           General Management
Authority. Subject to Sections 9.2(b)
and (c):


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(i)           if
the title assigned to an Officer is one commonly used for officers of a business
corporation formed under the Delaware General Corporation Law, then the
assignment of such title will thereby constitute the delegation to such Officer
of the authority and duties that are customarily associated with such office
pursuant to the Delaware General Corporation Law;




(ii)          an
Officer has the right, power and authority in such capacity to transact business
in the name of the Company, to act for or on behalf of the Company and to bind
the Company; and




(iii)         the
Officers, in their respective capacities as Officers, have full and complete
discretion to manage and control the day-to-day business, operations and affairs
of the Company in the ordinary course of its business, to make all decisions
affecting the day-to-day business, operations and affairs of the Company in the
ordinary course of its business and to take all such actions as they deem
necessary or appropriate to accomplish the foregoing.




(b)           General Limitations.
No Officer (including the CEOs) is entitled to take any action on behalf of any
Company Entity if such action (i) is not within the scope of such Officer’s
authority, (ii) requires (either pursuant to applicable law or the
Company’s Organizational Documents) Board Approval, (iii) requires approval
of all or some of the Members (including approval of a Majority Vote of the
Members as contemplated by Section 7.6(c))
or (iv) is inconsistent with the Annual Plan in effect at the time of such
action.




(c)           Specific Limitations.
The rights, powers and authorities of the Quigley Designated CEO are subject to
any restriction (whether specific or general) that Quigley has placed upon such
Quigley Designated Officer. The rights, powers and authorities of the PSI
Designated CEO are subject to any restriction (whether specific or general) that
PSI  has placed upon such PSI Designated Officer. The rights, powers
and authorities of the Officers other than the CEOs are subject to any
restriction (whether specific or general) that the Board has placed upon such
Officer pursuant to an action of the Board.




9.3           Removal, Resignation and
Filling of Vacancy of Officers.




(a)           Removal. The Board,
acting by Majority Vote, may remove any Officer other than the CEOs, for any
reason or for no reason, at any time. Quigley, and only Quigley, may remove the
Quigley Designated CEO, for any reason or for no reason, at any time. PSI, and
only PSI, may remove the PSI Designated CEO, for any reason or for no reason, at
any time.




(b)           Resignation. Any
Officer may resign at any time by giving written notice to the Company, and such
resignation will take effect on the date of the receipt of that notice or any
later time specified in that notice. Unless otherwise specified in such a
notice, the acceptance of such resignation will not be necessary to make it
effective. Any such resignation will not in any way prejudice the rights, if
any, of the Company or such Officer hereunder or otherwise.


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(c)           Filling Vacancies. A
vacancy in any office because of death, resignation, removal or otherwise is to
be filled in the manner prescribed herein for regular appointments to that
office.




9.4           Compensation of
Officers . The
Officers will be entitled to receive compensation from the Company as Approved
by the Board.




ARTICLE
10


ALLOCATIONS




10.1         Allocations of Net Profits
and Net Losses.




(a)           General. After taking
into account the special allocations set forth in Section 10.2,
and subject to Section 10.1(b),
the Net Profits and Net Losses for each Allocation Year shall be allocated among
the Members in the manner that will cause each of their Capital Accounts to
proportionately equal, as closely as possible, the excess of (i) the amount
that would be distributable to such Member under Section 11.4 if
the Company were dissolved, its affairs wound up and (A) all Company assets
were sold on the last day of the Allocation Year for cash equal to their
respective Gross Asset Values (except Company assets actually sold during such
Allocation Year shall be treated as sold for the consideration received
therefor), (B) all Company liabilities were satisfied (limited, with
respect to each “partner nonrecourse liability” and “partner nonrecourse debt,”
as defined in Regulations Section 1.704-2(b)(4), to the Gross Asset Value
of the Company assets securing such liabilities) and (C) the net assets
were immediately distributed in accordance with Section 11.4 to
the Members over (ii) such Member’s share (if any) of Company Minimum Gain
and Member Nonrecourse Debt Minimum Gain, computed immediately prior to the
hypothetical sale of Company assets.




(b)           Limitation on Loss
Allocations. If any allocation of Net Losses would cause a Member to have
an Adjusted Capital Account Deficit, those Losses instead shall be allocated to
the other Members pro rata until their Capital Accounts are reduced to zero, and
any remaining Losses will be allocated to each Member in accordance with the
relative number of Units held by such Member, as determined by the
Board.




10.2         Special
Allocations . The
following allocations shall be made prior to the allocations set forth in Section 10.1 and
in the following order and priority:




(a)           Minimum Gain
Chargeback. Except as otherwise provided in Regulations
Section 1.704-2(f), notwithstanding any other provision of this Article 10, if
there is a net decrease in Company Minimum Gain during any Allocation Year, each
Member shall be specially allocated items of Company income and gain for such
Allocation Year (and, if necessary, subsequent Allocation Years) in an amount
equal to such Member’s share of the net decrease in Company Minimum Gain,
determined in accordance with Regulations Section 1.704-2(g). Allocations
pursuant to the previous sentence shall be made in proportion to the respective
amounts required to be allocated to each Member pursuant thereto. The items to
be so allocated shall be determined in accordance with Regulations Sections
1.704-2(f)(6) and 1.704-2(j)(2). This Section 10.2(a)
is intended to comply with the minimum gain chargeback requirement in
Regulations Section 1.704-2(f) and shall be interpreted consistently
therewith.


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(b)           Member Minimum Gain
Chargeback. Except as otherwise provided in Regulations Section
1.704-2(i)(4), notwithstanding any other provision of this Article 10, if
there is a net decrease in Member Nonrecourse Debt Minimum Gain attributable to
a Member Nonrecourse Debt during any Allocation Year, each Member that has a
share of the Member Nonrecourse Debt Minimum Gain attributable to such Member
Nonrecourse Debt, determined in accordance with Regulations Section
1.704-2(i)(5), shall be specially allocated items of Company income and gain for
such Allocation Year (and, if necessary, subsequent Allocation Years) in an
amount equal to such Member’s share of the net decrease in Member Nonrecourse
Debt Minimum Gain, determined in accordance with Regulations Section
1.704-2(i)(4). Allocations pursuant to the previous sentence shall be made in
proportion to the respective amounts required to be allocated to each Member
pursuant thereto. The items to be so allocated shall be determined in accordance
with Regulations Sections 1.704-2(i)(4) and 1.704-2(j)(2). This Section 10.2(b)
is intended to comply with the minimum gain chargeback requirement in Regulation
Section 1.704-2(i)(4) and shall be interpreted consistently
therewith.




(c)           Qualified Income
Offset. If a Member unexpectedly receives any adjustments, allocations,
or distributions described in Regulations Sections 1.704-1(b)(2)(ii)(d)(4),
1.704-1(b)(2)(ii)(d)(5), or 1.704-1(b)(2)(ii)(d)(6), then items of Company
income and gain shall be specially allocated to such Member in an amount and
manner sufficient to eliminate, to the extent required by the Regulations, any
Adjusted Capital Account Deficit of such Member as quickly as possible, provided
that an allocation pursuant to this Section 10.2(c)
shall be made only if and to the extent that such Member would have an Adjusted
Capital Account Deficit after all other allocations provided for in this Article 10 have
been tentatively made as if this Section 10.2(c)
were not in this Agreement.




(d)           Gross Income
Allocation. If a Member has an Adjusted Capital Account Deficit at the
end of any Allocation Year, then such Member shall be specially allocated items
of Company gross income and gain in the amount of such excess as quickly as
possible, provided that an allocation pursuant to this Section 10.2(d)
shall be made only if and to the extent that such Member would have an Adjusted
Capital Account Deficit after all other allocations provided for in this Article 10 have
been made as if Section 10.2(c)
and this Section 10.2(d)
were not in this Agreement.




(e)           Member Nonrecourse
Deductions. Any Member Nonrecourse Deductions for any Allocation Year
shall be allocated to the Member that bears the economic risk of loss with
respect to the Member Nonrecourse Debt to which such Member Nonrecourse
Deductions are attributable in accordance with Regulations Section
1.704-2(i)(1).




(f)           Nonrecourse
Deductions. Nonrecourse Deductions for any Allocation Year shall be
allocated to each Member in accordance with the relative number of Units held by
such Member, as determined by the Board.


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(g)           Section 754
Adjustments. To the extent that an adjustment to the adjusted tax basis
of any Company asset pursuant to Code Section 734(b) or 743(b) is required
pursuant to Regulations Sections 1.704-1(b)(2)(iv)(m)(2) or
1.704-1(b)(2)(iv)(m)(4) to be taken into account in determining Capital Accounts
as the result of a distribution to a Member in complete liquidation of its
interest in the Company, the amount of such adjustment to Capital Accounts shall
be treated as an item of gain (if the adjustment increases the basis of such
Company asset) or loss (if the adjustment decreases such basis), and such gain
or loss shall be specially allocated (i) to the Members in accordance with their
respective interests in the Company, if Regulations Section
1.704-1(b)(2)(iv)(m)(2) applies, or (ii) to the Member to which such
distribution was made, if Regulations Section 1.704-1(b)(2)(iv)(m)(4)
applies.




(h)           Curative Allocations.
The allocations set forth in Section 10.1(b) and
Section 10.2(a)
through (g)
(collectively, the “Regulatory
Allocations”) are intended to comply with certain requirements of the
Regulations. It is the intent of the Members that, to the extent possible, all
Regulatory Allocations shall be offset either with other Regulatory Allocations
or with special allocations of other items of Company income, gain, loss or
deduction pursuant to this Section 10(h).
Therefore, notwithstanding any other provisions of this Article 10 (other
than the Regulatory Allocations), the Board shall make such offsetting special
allocations of Company income, gain, loss or deduction in whatever manner it
determines appropriate so that, after such offsetting allocations are made, each
Member’s Capital Account balance is, to the extent possible, equal to the
Capital Account balance such Member would have had if the Regulatory Allocations
were not part of this Agreement and all Company items were allocated pursuant to
this Article 10
without regard to the Regulatory Allocations.




(i)        
   Constructive
Payments. Notwithstanding anything to the contrary contained herein, if a
taxing authority determines that, for income tax purposes, the Company will be
treated as making a payment to any Initial Member or any of its Affiliates for
services or property (including any license) provided by such Person to the
Company under the License Agreement, then (i) the Company shall specially
allocate items of deduction or loss to such Initial Member in an amount equal to
the amount of such constructive payment and (ii) such Initial Member shall
be treated as having contributed to the Company an amount of cash equal to the
gross amount of such constructive payment.




10.3         Other Allocation
Rules.




(a)           Net
Profits, Net Losses and any other items of income, gain, loss or deduction shall
be allocated to the Members pursuant to this Article 10 as of the
last day of each Allocation Year; provided, that Net
Profits, Net Losses and such other items shall also be allocated at such times
as the Gross Asset Values of Company assets are adjusted pursuant to paragraph
(ii) of the definition of Gross Asset Value.




(b)           For
purposes of determining the Net Profits, Net Losses, or any other items
allocable to any period, Net Profits, Net Losses, and any such other items shall
be determined on a daily, monthly, or other basis, as determined by the Board
using any permissible method under Code Section 706 and the Regulations
thereunder.


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(c)           The
Members acknowledge the income tax consequences of the allocations made by this
Article 10 and
shall report their respective shares of Company income and loss for income tax
purposes in a manner consistent with this Article
10.




10.4         Tax Allocations; Code
Section 704(c) Allocations.




(a)           Except
as otherwise provided in this Section 10.4, each
item of Company income, gain, loss and deduction for federal income tax purposes
shall be allocated among the Members in the same manner as such items are
allocated for book purposes under this Article 10, except
that if such allocation is not permitted by the Code or other applicable law,
then the Company’s subsequent income, gains, losses, deductions and credits for
federal income tax purposes will be allocated among the Members so as to reflect
as nearly as possible the allocation set forth herein in computing their
respective Capital Accounts.




(b)           In
accordance with Code Section 704(c) and the Regulations thereunder, income,
gain, loss, and deduction with respect to any property contributed to the
capital of the Company shall, solely for tax purposes, be allocated among the
Members so as to take account of any variation between the adjusted basis of
such property to the Company for federal income tax purposes and its initial
Gross Asset Value using any allocation method permitted under Regulations
Section 1.704-3, as determined by the Board.




(c)           In
the event the Gross Asset Value of any Company assets is adjusted pursuant to
paragraph (ii) of the definition of Gross Asset Value, subsequent allocations of
income, gain, loss, and deduction with respect to such Company assets shall take
account of any variation between the adjusted basis of such Company assets for
federal income tax purposes and its Gross Asset Value in the same manner as
under Code Section 704(c) and the Regulations thereunder.




(d)           Any
elections or other decisions relating to such allocations shall be made by the
Board, in any manner that reasonably reflects the purpose and intention hereof.
Allocations pursuant to this Section 10.4 are
solely for purposes of federal, state, and local income taxes and shall not
affect, or in any way be taken into account in computing, any Member’s Capital
Account or share of Net Profits, Net Losses, other items, or distributions
pursuant to any provision hereof.




ARTICLE
11


DISTRIBUTIONS




11.1         Determination of Net Cash
Proceeds . Within
30 days following the close of each Fiscal Quarter, the Board shall determine
the Net Cash Proceeds for distribution pursuant to Section 11.3
with respect to such Fiscal Quarter.


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11.2         Tax
Distributions . So long
as the Company is treated as a partnership for federal income tax purposes, and
subject to the order of priority of distributions set forth in Section 11.3,
the Board shall cause the Company to distribute to each Member no later than 40
days following the last day of each Fiscal Quarter, to the extent of Net Cash
Proceeds with respect to such Fiscal Quarter, an amount of cash (a “Tax Distribution”)
that in the good faith judgment of the Board equals (a) the amount of
taxable income allocable to such Member in respect of such Fiscal Quarter (net
of taxable Net Losses allocated to such Member in respect of prior Fiscal
Quarters and not previously taken into account under this Section 11.2),
multiplied by (b) the Assumed Tax Rate.




11.3         Distributions Other than
Upon a Sale of the Company . The
Company shall, no later than 40 days following the close of each Fiscal Quarter
and at such other times as the Board may determine, distribute Net Cash Proceeds
(in an amount determined by the Board in accordance with Section 11.1),
other than Net Cash Proceeds attributable to the sale, exchange or disposition
of all or substantially all of the assets of the Company (such distributions to
be governed solely by Section 11.4),
to the Members in the following order of priority:




(a)           first, to the Members
(ratably among the Members based upon the aggregate Unreturned Funding Amount
from each Member immediately prior to such distribution) until the aggregate
Unreturned Funding Amount with respect to all outstanding Units held by all
Members immediately prior to such distribution has been reduced to
zero;




(b)           second, to the
Members, ratably among the Members based upon each Member’s share of the
aggregate Tax Distributions with respect to such Fiscal Quarter, as determined
under Section 11.2;
and




(c)           third, to the
Members, ratably among the Members based on the number of Units held by each
Member immediately prior to such distribution.




11.4         Distributions Upon a Sale of
the Company . The
Company shall distribute to the Members the net proceeds that it receives upon a
sale, exchange or other disposition of all or substantially all of the assets of
the Company, as soon as reasonably practicable upon receipt thereof, in the
following order of priority:




(a)           first, to the Members
(ratably among such Members based upon the aggregate Unreturned Capital with
respect to all outstanding Units held by each Member immediately prior to such
distribution) until the aggregate Unreturned Capital with respect to all
outstanding Units held by all Members immediately prior to such distribution has
been reduced to zero; and




(b)           second, to the
Members, ratably among the Members based on the number of Units held by each
Member immediately prior to such distribution.


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11.5         Distributions and Forfeiture
of Units in Connection with a Liquidity Event . In the
event of a Liquidity Event, each Member will be entitled to receive the same
portion of the aggregate consideration from such transaction that such Member
would have received if such aggregate consideration had been distributed by the
Company in accordance with Section 11.4.
Each Member shall take all necessary or desirable actions in connection with the
distribution of the aggregate consideration from any such transaction as
requested by the Board. Notwithstanding anything to the contrary herein, if any
class or series of Units would not be entitled pursuant to this Section 11.5 to
receive any portion of the aggregate consideration from a Liquidity Event
involving the Transfer of all of the outstanding Units, then, at the Board’s
election, effective as of immediately prior to the consummation of such
Liquidity Event, all outstanding Units of such class or series shall
automatically be forfeited and cancelled without consideration and all rights of
the holders thereof shall cease and such Units shall not be deemed to be
outstanding.




11.6         Withholding .
Notwithstanding anything to the contrary herein, (a) each Member hereby
authorizes the Company to withhold and pay over, or otherwise pay, any
withholding or other taxes payable by the Company (pursuant to the Code or any
other provision of United States federal, or state or local or other law) with
respect to such Member or as a result of such Member’s participation in the
Company, including as a result of any distribution to such Member and
(b) if and to the extent that the Company is required to withhold or pay
any such taxes, such Member will be deemed for all purposes hereof to have
received a payment from the Company as of the time such withholding or other tax
is required to be paid, which payment will be deemed to be a distribution with
respect to such Member’s Units to the extent that the Member (or any successor
to such Member’s Units (or the Economic Interest with respect thereto)) is then
entitled to receive a distribution. If the aggregate of such payments to a
Member for any period exceeds the distributions that such Member would have
received for such period but for such withholding, the Company shall notify such
Member as to the amount of such excess and such Member shall promptly contribute
to the Company, and shall indemnify the Company for, such amount.




ARTICLE
12


BOOKS,
RECORDS AND REPORTS




12.1         Reporting and
Accounting . The
Company shall keep, or cause to be kept, appropriate books and records with
respect to the Business, including all books and records necessary to provide
any information, lists and copies of documents required to be provided pursuant
to Section 12.2 or
pursuant to applicable Law. All matters concerning (a) the determination of
the relative amount of allocations and distributions among the Members pursuant
to Articles 10 and
11,
respectively, and (b) accounting procedures and determinations, and other
determinations not specifically and expressly provided for by the terms hereof,
shall be determined by the Board, the determination of which shall be final and
conclusive as to all Members absent manifest error.




12.2         Delivery of
Information . The
Company shall use commercially reasonable efforts to deliver or cause to be
delivered, within 45 days after the end of each Fiscal Year, to each Person who
was a Member at any time during such Fiscal Year, all information necessary for
the preparation of such Person’s United States federal and state income tax
returns. Except as set forth in this Article 12, no
Member, other than an Initial Member, is entitled under Section 18-305 of
the Act, under this Agreement or otherwise to inspect, review, obtain or receive
any information about any Company Entity.


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ARTICLE
13


TAX
MATTERS




13.1         Tax Matters
Member.




(a)           Quigley
is hereby designated as the Tax Matters Member. The Tax Matters Member is hereby
authorized and required to represent the Company at the direction of the Board
(at the expense of the Company) in connection with all examinations of the
affairs of the Company by any federal, state or local tax authorities, including
any resulting administrative and judicial proceedings, and to expend funds of
the Company for professional services and costs associated therewith. The Board
may change or otherwise designate the Tax Matters Member.




(b)           The
Tax Matters Member shall take such action as may be reasonably necessary to
cause each other eligible Member to become a “notice partner” within the meaning
of Code Section 6231(a)(8). To the extent and in the manner provided by
applicable Code sections and Regulations thereunder, the Tax Matters Member (i)
shall furnish the name, address, profits interest and taxpayer identification
number of each Member to the IRS and (ii) shall keep the Members reasonably
informed of all administrative and judicial proceedings for the adjustment of
Company items required to be taken into account by a Member for income tax
purposes. The Tax Matters Member shall notify the other Members within five
Business Days after it receives notice from the IRS (or any state and local tax
authority), of any administrative proceeding with respect to an examination of,
or proposed adjustment to, any Company tax items. Each Member shall cooperate
with the Board and the Tax Matters Member and shall do or refrain from doing any
and all things reasonably required by the Board or the Tax Matters Member in
connection with the conduct of such proceedings.




13.2         Tax
Returns . The
Company shall cause to be prepared and timely filed all federal, state and local
income tax returns or other returns or statements required by applicable law.
The Company shall, to the extent permitted by applicable law, elect or otherwise
take such tax positions as the Board, in its discretion,
determines.




13.3         Partnership Status for
Income Tax Purposes . The
Members intend that the Company shall be treated as a partnership for federal,
state and local income tax purposes, and the Company shall not elect, and the
Board shall not permit the Company to elect, to be treated as an association
taxable as a corporation for federal, state or local income tax purposes under
Regulations Section 301.7701-3 or under any corresponding provision of state or
local law. Each Member and the Company shall file all tax returns consistent
with such treatment. This characterization, solely for such tax purposes, does
not create or imply a general partnership among the Members for state law or any
other purpose.


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ARTICLE
14


TRANSFER
OF UNITS




14.1         Restriction on Transfers
(PSI Parent) . Except
as otherwise permitted pursuant to this Article 14: (a)
each Member shall not Transfer any Units or any Economic Interest that it holds;
and (b) PSI Parent shall not Transfer, and shall not cause or permit the
Transfer of (whether through the Transfer of Securities in a PSI Intermediate
Entity or otherwise), any Security that represents a direct or indirect interest
that PSI Parent has in the PSI Units Any Transfer (of Units or otherwise) other
than in accordance with this Article 14 will
be null and void ab
initio (and, in the case of any such purported Transfer of Units, the
Company shall not record any such Transfer upon its books).




14.2         Permitted Transfers (PSI
Parent).




(a)           Permitted Transfers by
Members. Subject to Section 14.3,
(i) a Member may Transfer all, but not less than all, of the Units held by
such Member to a Person that is a Permitted Transferee of such Member at the
time of Transfer, (ii) a Member may Sell Units in accordance with and
subject to Articles 15 and
16,
(iii) a Member may Transfer all or some of the Initial Member Units that it
holds if all other Members holding Initial Member Units consent thereto in
writing, (iv) a Member may Transfer all or some of the Non-Initial Member
Units that it holds if all other Members consent thereto in writing, and
(v) a Member may Transfer Units directly held by such Member in connection
with a Liquidity Event Approved by the Board.




(b)           Permitted Transfers by PSI
Parent. Subject to Section 14.3, PSI
Parent may Transfer any Security that represents an indirect interest in the PSI
Units if, immediately after such Transfer, the transferee holding such PSI Units
is a wholly owned Subsidiary of PSI Parent.




14.3         Certain Prohibited Transfers
(PSI Parent).




(a)           Generally.
Notwithstanding anything to the Contrary herein, unless the Board determines
otherwise, any direct or indirect Transfer of Units that is otherwise permitted
hereunder will be null and void ab initio, and each Party
shall not make or agree to make any such Transfer, if:




(i)           such
Transfer would, in the opinion of counsel to the Company, cause the Company to
cease to be classified as a partnership for federal or state income tax
purposes;




(ii)         such
Transfer requires the registration of the Units that are the subject of such
Transfer pursuant to any applicable federal or state securities
laws;




(iii)        such
Transfer subjects the Company to regulation under the Investment Company Act of
1940, the Investment Advisers Act of 1940 or the Employee Retirement Income
Security Act of 1974;




(iv)        such
Transfer results in a violation of applicable Law;




(v)         such
Transfer is made to any Person who lacks the legal right, power or capacity to
own such Units; or


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(vi)        the
Company does not receive written instruments (including copies of any
instruments of Transfer and such transferee’s consent to be bound hereby as a
Member) that are in a form reasonably satisfactory to the Board.




(b)           Further
Limitations.




(i)           In
order to permit the Company to qualify for the benefit of a “safe harbor” under
Code Section 7704, notwithstanding anything to the contrary herein, no Transfer
of any Unit will be permitted or recognized by the Company (within the meaning
of Regulations Section 1.7704-1(d)) and the Company shall not issue any Units if
and to the extent that such Transfer or issuance would cause the Company to have
more than 100 partners (within the meaning of Regulations Section 1.7704-1(h),
including the look-through rule in Regulations Section
1.7704-1(h)(3)).




(ii)         Notwithstanding
anything to the contrary herein, no Unit may be Transferred if such Transfer
would affect the Company’s existence or qualification as a limited liability
company under the Act.




14.4         Termination of Restrictions
(PSI Parent) . The
restrictions on Transfers set forth in this Article 14 will
terminate immediately prior to the closing of an Initial Public Offering;
provided, however, that any restrictions on Transfers that otherwise exist
(including under applicable federal and state securities laws) will not be
terminated thereby.




14.5         Rights of Assignees (PSI
Parent) . Until
such time, if any, as a transferee of any Transfer of Units permitted pursuant
to this Article
14 is admitted to the Company as a Member pursuant to Section 14.6:
(a) such transferee will be an Assignee only, with respect to such Units,
and will only be entitled to receive, to the extent Transferred, the
distributions and allocations of income, gain, loss, deduction, credit, or
similar items to which the transferring Member would be entitled in respect of
such Units and assuming the transferee were a Member solely for such purposes;
(b) such Assignee will not be entitled to exercise any other rights or
powers of a Member, and such other rights or powers will remain with the
transferring Member; and (c) the transferring Member will remain a Member
with respect to the Units transferred (except to the extent provided in
clause (a) of this Section 14.5),
even if such Member has Transferred all of its Units to one or more Assignees.
Subsequent Transfers of Units to an Assignee will be subject to this Article 14 to
the same extent as Transfers of Units by a Member. Upon a transferee’s
admission, in accordance with this Article 14, as a
Member with respect to Units Transferred to such transferee in accordance with
this Article 14, such
transferee will thereby be entitled to the same rights and be subject to the
same obligations with respect to such Units as the transferor
Member.




14.6         Admission of Assignees as
Members (PSI Parent).




(a)           An
Assignee will become a Member with respect Units that have been Transferred to
such Assignee only if and when each of the following conditions are
satisfied:


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(i)           the
transferor of such Units gives written notice to the Company requesting that the
Assignee be admitted as a Member with respect to such Units and setting forth
the name and address of the Assignee, the Units transferred and the effective
date of the Transfer; and




(ii)         the
Company receives a Joinder Agreement signed by the Assignee and such other
written documents effecting such Transfer in a form reasonably satisfactory to
the Board.




(b)           Upon
the admission of any Person as a Member, (i) the Member Schedule will
thereby be deemed amended to reflect the name, address and Units of such Member
and to eliminate or adjust, if necessary, the name, address and Units of the
applicable transferor Member and (ii) the Company will thereby be permitted
to insert a copy of the Member Schedule that reflects such
amendments.




14.7         Withdrawal of Members Upon
Admission of Assignee (PSI Parent) . If a
Member has Transferred all of its Units in the Company to one or more Assignees,
then such Member will be deemed withdrawn from the Company as a Member only if
and when all such Assignees have been admitted as Members in accordance
herewith. A Member will not cease to be a Member as a result of the Bankruptcy
of such Member or as a result of any other events specified in § 18-304 of the
Act. So long as a Member continues to own or hold any Units, such Member shall
not resign as a Member prior to the dissolution and winding up of the Company
and any such purported or attempted resignation by a Member prior to the
dissolution or winding up of the Company shall be null and void ab initio.




14.8         Incapacity of Member (PSI
Parent) . Upon
the Incapacity of a Member, such Member’s Units will automatically be converted
to an Economic Interest only, with respect thereto, and such Member (or its
executor, administrator, trustee or receiver, as applicable) will thereby be
deemed an Assignee for all purposes hereof with respect to the same Economic
Interest as was held by such Member prior to its Incapacity (but without any
other rights of a Member unless the holder of such Economic Interest is admitted
as a Member pursuant to Section 14.6).




14.9         Death of a Member (PSI
Parent) . The
death of a Member will not operate to dissolve the Company. Upon the death of a
Member, the Company shall continue to conduct its business and the Units owned
by the deceased Member will thereby be transferred pursuant to such Member’s
will or by operation by law, as the case may be, subject to the terms
hereof.


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ARTICLE
15


RIGHT
OF FIRST REFUSAL




15.1         Notice of Proposed
Sale . After
the date that is the two-year anniversary of the Effective Date, any Member (any
such Member, the “Selling Member”) may
Sell, in accordance with and subject to this Article 15, all,
but not less than all, of the Units it then holds (such Units, collectively, the
“Offered
Units”), but only for cash consideration and only if the proposed
purchaser or transferee (the “Proposed Transferee”)
agrees to purchase all Tag-Along Units (if any) in accordance with Article 16. At
least 30 days before the Selling Member Sells the Offered Units to the Proposed
Transferee, the Selling Member shall deliver to all other Members (such other
Members, the “Remaining Members”),
with a copy to the Company, a written notice (the “Proposed Sale
Notice”) stating: (a) the Selling Member’s bona fide intention to
Sell the Offered Units (any such Sale, a “Proposed Sale”)
pursuant to a bona fide written offer to one (but only one) Proposed Transferee;
(b) the name and address of the Proposed Transferee; (c) the number of
Offered Units to be Sold to the Proposed Transferee; (d) the bona fide cash
price for which the Selling Member proposes to Sell the Offered Units (the
amount of such bona fide cash price, the “Offered Price”; the
amount of such bona fide cash price determined on a per Offered Unit basis, the
“Per Unit Offered
Price”), which Offered Price must be the product of an arms’ length
negotiation; (e) the proposed date of the Sale; and (f) other general
terms and conditions to which the proposed Sale is subject. Each Proposed Sale
Notice, when duly delivered, will constitute, for 21 days after the first date
on which a Remaining Member has received (or is deemed to have received) such
Proposed Sale Notice (such date, the “Proposed Sale Notice Receipt
Date”), an irrevocable offer by such Selling Member to sell the Offered
Units at the Offered Price to the Remaining Member, subject to this Article 15. The
Selling Member shall certify in the Proposed Sale Notice that the Selling Member
has received a firm offer at the Offered Price from the Proposed Transferee with
respect to the proposed Sale and in good faith believes that the Selling Member
(or one of its Affiliates) and the Proposed Transferee will enter into a binding
agreement with respect to the proposed Sale on the general terms set forth in
the Proposed Sale Notice.




15.2         Exercise of Right of First
Refusal . Subject
to Article 16, on
and after the Proposed Sale Notice Receipt Date and prior to the date that is 21
days thereafter, the Remaining Members may elect, acting collectively, by giving
written notice to the Selling Member (such notice, the “ROFR Participation
Notice”), to purchase all, but not less than all, of the Offered Units at
the Offered Price. The ROFR Participation Notice must specify the number of
Offered Units to be purchased by each Remaining Member. The ROFR Participation
Notice given, collectively, by the Remaining Members in accordance with this
Section 15.2 and
the election of the Remaining Members set forth therein will be irrevocable
except with the written consent of the Selling Member. If the terms reflected in
the Proposed Sale Notice, at any time after the Selling Member has provided a
Proposed Sale Notice in accordance with Section 15.1 and
prior to the consummation of the applicable Proposed Sale, are amended or do not
reflect the terms of the applicable Proposed Sale (including with respect to the
Offered Price), then (a) the Selling Member shall thereafter promptly
provide to the Remaining Members a revised Proposed Sale Notice accurately
reflecting the terms of the Proposed Sale (and otherwise in accordance with
Section 15.1),
(b) the Remaining Members will thereby be afforded an additional 21-day
period after the provision of such revised Proposed Sale Notice to elect to
exercise their right of first refusal pursuant to this Section 15.2,
and (c) the terms of this Article 15 and
Article 16
will thereby apply to such new Proposed Sale Notice. A Member’s failure to
exercise its rights pursuant to this Section 15.2
will not operate as a waiver of any prior or future exercise of its rights under
this Section 15.2.


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15.3         Payment;
Closing.




(a)           Subject
to Section 15.3(b),
the Sale of Offered Units to Remaining Members will be effected pursuant to one
or more written agreements between the Selling Member and the Remaining Members
on the terms and conditions set forth in the Proposed Sale Notice (any such
written agreement, a “ROFR Unit Purchase
Agreement”) and that contains customary representations and warranties,
including a representation and warranty by the Selling Member that the Offered
Units are being Sold free and clear of all Liens (except those arising hereunder
or under applicable federal or state laws); provided, however, that no
Remaining Member will be required to make any representations or warranties in
connection with the transaction other than customary representations and
warranties solely with respect to such Remaining Member and its ownership of the
Offered Units being Sold to such Remaining Member.




(b)           To
the extent that the terms or conditions reflected in the Proposed Sale Notice
are inconsistent with this Section 15.3(b),
or to the extent that the terms or conditions of this Section 15.3(b)
are absent from the Proposed Sale Notice, each ROFR Unit Agreement will contain
the following terms and conditions:




(i)           the
closing of the Sale of Offered Units to each Remaining Member will take place
(A) at the offices of counsel for the Selling Member (or at such other
location as may be agreed to by the Selling Member and the Remaining Members),
(B) at 11:00 AM local time (or at such other time as may be agreed to by
the Selling Member and the Remaining Members) and (C) on the date (the
“Offered Units Closing
Date”) that is the third Business Day after the satisfaction or waiver of
the closing conditions (if any) provided in such ROFR Unit Purchase Agreement,
other than such conditions as are to be satisfied at the closing, or, if no
closing conditions are provided in such ROFR Unit Purchase Agreement, the tenth
Business Day following the Selling Member’s receipt (or deemed receipt) of the
ROFR Participation Notice (or that is such other date as may be agreed to by the
Selling Member and the Remaining Members); and




(ii)         the
Remaining Members will pay, in aggregate, the Offered Price (subject to any
applicable withholdings specified in the ROFR Unit Purchase Agreement) at the
closing in cash by wire transfer of immediately available funds to an account
specified at least two Business Days prior to the Offered Units Closing Date by
the Selling Member to the Remaining Members or otherwise in the manner and at
the time(s) set forth in the Proposed Sale Notice.




15.4         Selling Member’s Right to
Sell . Subject
to the last sentence of this Section 15.2, if
the Remaining Members have not elected, in accordance with Section 15.2, to
purchase all of the Offered Units, then the Selling Member may Sell all, but not
less than all, of the Offered Units to the Proposed Transferee at the Offered
Price, and upon terms and conditions no more favorable to the Proposed
Transferee than are specified in the Proposed Sale Notice; provided, that
(a) the Sale of the Offered Units is consummated within 75 days after the
date of the Proposed Sale Notice, (b) the Sale of the Offered Units is made
in accordance with the terms hereof (including Article 16) and
all other agreements between the Selling Member and the Company, (c) the
Sale of such Offered Units is effected in accordance with any applicable
securities laws, and (d) simultaneously with or prior to the Sale of any
Offered Units, the Proposed Transferee (unless already a Member) executes and
delivers to the Company a Joinder Agreement with respect to the Offered Units
being acquired by the Proposed Transferee, and (e) if applicable, the Sale
of the Offered Units complies with Article 16. If
the Offered Units are not Sold to the Proposed Transferee within such 75-day
period and as otherwise described in the Proposed Sale Notice, then, thereafter,
before such Selling Member Sells the Offered Units, such Selling Member shall
give a new Proposed Sale Notice to the Remaining Members at such time with
respect to the Offered Units, and the Remaining Members will again have the
rights afforded under this Article 15 and
Article 16
with respect to the Offered Units.


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15.5         Termination of Rights of
First Refusal . All
rights and benefits afforded to the Members under this Article 15 and
all obligations, duties and liabilities imposed upon the Member under this Article 15 will
not apply after, and will terminate immediately before, the closing of the IPO;
provided, however, that,
following the closing of the IPO, each Member will be and remain liable for any
breach or violation of such obligations, duties and liabilities arising or
accruing prior to the closing of the IPO.




ARTICLE
16


TAG-ALONG
RIGHTS




16.1         Right to Participate in
Proposed Sale . With
respect to any Proposed Sale to a Proposed Transferee that is permitted under
Section 15.4,
all Remaining Members have the right, subject to the terms of this Article 16, to
participate in such Proposed Sale.




16.2         Exercise of Tag-Along
Right . If a
ROFR Participation Notice is not delivered in accordance with Section 15.2,
then, on and after the Proposed Sale Notice Receipt Date and prior to the date
that is 21 days thereafter, each Remaining Member may elect (a Remaining Member
making such election in accordance with this Section 16.2, a
“Tag-Along
Member”) by giving written notice to the Selling Member (such notice, a
“Tag-Along
Participation Notice”), to Sell all, but not less than all, of the Units
held at such time by such Tag-Along Member (such Units, with respect to each
Tag-Along Member, “Tag-Along Units”) to
the Proposed Transferee at a per Tag-Along Unit price equal to the Per Unit
Offered Price. Each Tag-Along Participation Notice must specify the number of
Tag-Along Units to be Sold by the Tag-Along Member providing such Tag-Along
Participation Notice. Any Tag-Along Participation Notice given by a Tag-Along
Member in accordance with this Section 16.2 and
the election of such Tag-Along Member set forth therein will be irrevocable
except with the written consent of the Selling Member. A Member’s failure to
exercise its rights pursuant to this Section 16.2
will not operate as a waiver of any prior or future exercise of its rights under
this Section 16.2.




16.3         Payment;
Closing.




(a)           Subject
to Section 16.3(b),
the Sale of the Offered Units and the Tag-Along Units to the Proposed Transferee
will be effected pursuant to one or more written agreements between the Selling
Member and the Tag-Along Members, on the one hand, and the Proposed Transferee,
on the other hand, on the terms and conditions set forth in the Proposed Sale
Notice (any such written agreement, a “Tag-Along Unit Purchase
Agreement”), on the terms set forth in Section 15.4,
and that contains customary representations and warranties, including a
representation and warranty by each Tag-Along Member that such Tag-Along
Member’s Tag-Along Units are being Sold free and clear of all Liens (except
those arising hereunder or under applicable federal or state laws); provided, however, that no
Tag-Along Member will be required to make any representations or warranties in
connection with the transaction other than customary representations and
warranties solely with respect to such Tag-Along Member and its ownership of and
delivery of good title to its Tag-Along Units being Sold to the Proposed
Transferee.


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(b)          To
the extent that the terms or conditions reflected in the Proposed Sale Notice
are inconsistent with this Section 16.3(b),
or to the extent that the terms or conditions of this Section 16.3(b)
are absent from the Proposed Sale Notice, each Tag-Along Unit Agreement will
contain the following terms and conditions:
  (i)           the
closing of the Sale of Tag-Along Units and Offered Units to the Proposed
Transferee will take place (A) at the offices of counsel for the Selling
Member (or at such other location as may be agreed to by the Selling Member, the
Tag-Along Members and the Proposed Transferee), (B) at 11:00 AM local time
(or at such other time as may be agreed to by the Selling Member, the Tag-Along
Members and the Proposed Transferee) and (C) on the date (the “Tag-Along Unit Closing Date”)
that is the third Business Day after the satisfaction or waiver of the closing
conditions (if any) provided in such Tag-Along Unit Purchase Agreement, other
than such conditions as are to be satisfied at the closing, or, if no closing
conditions are provided in such Tag-Along Unit Purchase Agreement, the tenth
Business Day following the Selling Member’s receipt (or deemed receipt) of the
Tag-Along Participation Notice (or that is such other date as may be agreed to
by the Proposed Transferee, the Selling Member and the Tag-Along Members);
and
  (ii)          the
Proposed Transferee will pay to each Tag-Along Member an amount equal to the
number of Tag-Along Units being Sold by such Tag-Along Member multiplied by the
Per Unit Offered Price (subject to any applicable withholdings specified in the
Tag-Along Unit Purchase Agreement) at the closing in cash by wire transfer of
immediately available funds to one or more accounts specified at least two
Business Days prior to the Tag-Along Units Closing Date by such Tag-Along Member
to the Proposed Transferee or otherwise in the manner and at the time(s) set
forth in the Proposed Sale Notice.
  16.4        Selling Member’s Right to
Sell . Subject
to the last sentence of Section 15.2, if
no Remaining Members have elected, in accordance with Section 16.2, to
Sell Tag-Along Units, then the Selling Member may Sell all, but not less than
all, of the Offered Units to the Proposed Transferee at the Offered Price, or at
a higher price, and upon terms and conditions no more favorable to the Proposed
Transferee than are specified in the Proposed Sale Notice and otherwise in
accordance with Section 15.4.
  16.5        Termination of Tag-Along
Rights . All
rights and benefits afforded to the Members under this Article 16 and
all obligations, duties and liabilities imposed upon the Member under this Article 16 will
not apply after, and will terminate immediately before, the closing of the IPO;
provided, however, that,
following the closing of the IPO, each Member will be and remain liable for any
breach or violation of such obligations, duties and liabilities arising or
accruing prior to the closing of the IPO.
  -50-
  ARTICLE
17
 STANDARDS
OF CONDUCT, EXCULPATION, INDEMNIFICATION AND INSURANCE
  17.1        Standards of Conduct (PSI
Parent).
  (a)          No Fiduciary Duties; Other
Duties and Standards. Each Member or Manager, in his, her or its capacity
as such (each Member or Manager, in such capacity, a “Key Party”), will be
and hereby is relieved of any and all fiduciary duties that might otherwise
arise out of or in connection herewith or the relationships created or evidenced
hereby or thereby, whether at law or in equity, other than to act in good faith
with respect to the Company, the Members and this Agreement. Without limiting
the generality of the immediately foregoing sentence, to the extent that the
provisions hereof restrict or eliminate the duties of a Key Party otherwise
existing at law or in equity, such provisions replace such duties to the
greatest extent permitted under applicable Law. Whenever a Key Party is required
or permitted to make a decision, take or approve an action, or omit to do any of
the foregoing with an express standard of behavior (including standards such as
“reasonable” or “good faith”), then such Key Party shall comply with such
express standard but will not be subject to any other, different or additional
standard imposed by this Agreement or otherwise applicable Law.
  (b)          Reliance Upon
Provisions. To the extent that any Key Party, has, at law or in equity,
duties to the Company, any other Member or any Person that is subject to the
terms hereof, such Key Party acting in good faith in accordance herewith will
not be liable to the Company, any Member or any other Person in respect of any
breach of any such duty for its good faith reliance on the provisions
hereof.
  (c)          Consideration of Interests
in Decision-Making. Whenever a Key Party is required or permitted to make
a decision, take or approve an action, or omit to do any of the foregoing in its
discretion, under a similar grant of authority or latitude, or without an
express standard of behavior, then such Key Party will be entitled to consider
only such interests and factors, including its own, as it desires, and will, to
the fullest extent permitted by applicable Law, have no duty or obligation to
consider any other interests or factors whatsoever. The Parties acknowledge that
(i) the Quigley Designated Managers are and will be appointed in part to
protect and further the interests of Quigley and are entitled to act, refrain
from acting and make decisions, in their capacities as Managers, solely in the
interests of Quigley and (ii) the PSI Designated Managers are and will be
appointed in part to protect and further the interests of PSI and PSI Parent and
are entitled to act, refrain from acting and make decisions, in their capacities
as Managers, solely in the interests of PSI.
  17.2        Liability (PSI
Parent) . Except
as otherwise provided by the Act, the Company’s debts, obligations and
Liabilities, whether arising in contract, tort or otherwise, will be solely the
Company’s debts, obligations and Liabilities, and no Manager or Member will be
obligated personally for any such debt, obligation or Liability solely by reason
of being a Manager or Member.
  -51-
  17.3         Exculpation (PSI
Parent).
  (a)          General. No Covered
Person will be liable to the Company or to any other Covered Person in respect
of any Suits, Orders, losses, damages, penalties, dues, fines, costs, amounts
paid in settlement, Liabilities, obligations, expenses (including all attorneys’
and experts’ fees), interest, fees and other costs of enforcement (collectively,
“Losses”) by
reason of any act taken or not taken by such Covered Person in good faith on
behalf of the Company and in a manner reasonably believed to be within the scope
of authority conferred on such Covered Person hereby; provided, however, that the
foregoing will not apply to the extent that a Loss was incurred by reason of
such Covered Person’s gross negligence, fraud or willful
misconduct.
  (b)          Reliance Upon Records and
Other Information. A Covered Person will be fully protected in relying in
good faith upon the records of the Company and upon such information, opinions,
reports or statements presented to the Company by any Person as to matters the
Covered Person reasonably believes are within such other Person’s professional
or expert competence and that has been selected with reasonable care by or on
behalf of the Company, including information, opinions, reports or statements as
to the value and amount of the assets, liabilities, Net Profits, Net Losses or
net cash flow or any other facts pertinent to the existence and amount of assets
from which distributions to Members might properly be paid.
  17.4        Indemnification (PSI
Parent).
  (a)          Covered Persons. To
the fullest extent permitted by applicable Law, a Covered Person will be
entitled to indemnification from the Company in respect of any Loss incurred or
suffered by such Covered Person by reason of any act taken or not taken by such
Covered Person (including alleged breaches of fiduciary duty) in good faith on
behalf of the Company and in a manner reasonably believed to be within the scope
of authority conferred on such Covered Person hereby, except that no Covered
Person will be entitled to be indemnified hereunder in respect of any Loss
incurred or suffered by such Covered Person by reason of gross negligence, fraud
or willful misconduct with respect to such acts or omissions; provided, however, that any
indemnity under this Section 17.4(a)
will be provided out of and to the extent of Company Assets only, and neither
any Manager nor any other Member will have any personal liability with respect
to such indemnity.
  (b)          Specified Persons.
Without limiting any obligation of the Company under Section 17.4(a),
the Company may, but only if so authorized by the Board in its sole and absolute
discretion, indemnify any employee or agent of the Company or any other Person
(each such employee, agent or other Person, as the case may be, a “Specified Person”)
for any Loss incurred or suffered by such Specified Person by reason of any act
taken or not taken by such Specified Person in good faith on behalf of the
Company and in a manner reasonably believed to be within the scope of authority
conferred on such Specified Person by the Company, except that no Specified
Person will be entitled to be indemnified in respect of any Loss incurred or
suffered by such Specified Person by reason of gross negligence, fraud or
willful misconduct with respect to such acts or omissions; provided, however, that any
indemnity under this Section 17.4(b)
will be provided out of and to the extent of Company Assets only, and neither
any Manager nor any other Member will have any personal liability with respect
to such indemnity.
  -52-
  17.5        Expenses (PSI
Parent) . To the
fullest extent permitted by applicable Law, but subject to Board Approval, the
Company may from time to time advance expenses (including legal fees) that a
Covered Person incurs in defending any Suit prior to the final disposition of
such Suit upon the Company’s receipt of an undertaking by or on behalf of the
Covered Person to repay such amount if it shall be determined that the Covered
Person is not entitled to be indemnified as authorized in this Section 17.5. If
and only if the Board, in its sole and absolute discretion, Approves, then the
Company may advance expenses (including legal fees and expert fees) incurred by
a Specified Person in defending any Suit.
  17.6        Insurance (PSI
Parent) . The
Company may purchase and maintain insurance for the Business, to the extent and
in such amounts as the Board deems prudent and Approves in its sole and absolute
discretion, on behalf of Covered Persons, Specified Persons and such other
Persons as the Board may Approve in its sole and absolute discretion, against
any Liability that may be asserted against or expenses that may be incurred by
any such Person in connection with the activities of the Company or such
indemnitees, regardless of whether the Company would have the power to indemnify
such Person against such Liability under the provisions hereof. The Company may
enter into indemnity contracts with Covered Persons, Specified Persons and such
other Persons as the Board Approves in its sole and absolute discretion and may
adopt written procedures pursuant to and which arrangements are made for the
advancement of expenses and the funding of obligations under Section 17.4 and
containing such other procedures regarding indemnification as the Board may
Approve in its sole and absolute discretion.
  17.7        Third-Party Beneficiary
Status (PSI Parent) . Each
Key Party and Covered Person is hereby made a third-party beneficiary of the
rights that would be afforded to such Key Party or Covered Person, respectively,
as if such Key Party or Covered Person, respectively, were an original signatory
hereto for such purposes (and only for such purposes).
  ARTICLE
18
 CONFIDENTIALITY
  18.1        Confidentiality Obligations
(PSI Parent) . Subject
to the other terms of this Article 18 and
except as the Members may otherwise agree, each Member and PSI Parent (each, a
“Receiving
Party”) shall hold in strict confidence and shall not directly or
indirectly disclose to any other Person any Confidential Information. Each
Receiving Party acknowledges that disclosure of Confidential Information could
destroy the value thereof and cause irreparable harm to the Company and/or
another Member. Each Receiving Party shall use, and shall cause its Affiliates
to use, at least the same level of care and protection of Confidential
Information as such Receiving Party uses to prevent unauthorized use and
unauthorized disclosure of its own confidential information (but in no event
less than a reasonable standard of care).
  -53-
  18.2        Certain Limitations on
Confidentiality Obligations (PSI Parent).
  (a)          Disclosure to
Affiliates. A Receiving Party may disclose Confidential Information to
one or more of its Affiliates, provided that such Affiliate (i) has a need
to know such Confidential Information in order to fulfill their duties related
to the Company or the business operations of such Receiving Party and
(ii)(A) agrees in writing to be bound by the obligations of this Article 18 or
(B) at the time of such disclosure is bound to protect Confidential
Information from unauthorized disclosure pursuant to a fiduciary or similar duty
or pursuant to the terms of an enforceable confidentiality agreement containing
comparable restrictions on the disclosure of Confidential Information. The
Receiving Party warrants that it will be fully responsible for any breach hereof
by its Affiliates to which it discloses Confidential Information.
  (b)          Disclosure Required by Law,
Etc. A Receiving Party may disclose Confidential Information to others as
required by Law. Any such Receiving Party shall promptly notify the Company of
the specifics of such requirement prior to the actual disclosure, use diligent
efforts to limit such disclosure and to obtain confidential treatment or a
protective order for such Confidential Information, and allow the Company to
participate in such process undertaken to protect the Confidential Information.
The Receiving Party shall cooperate with the Company, upon the Company’s
reasonable request, in connection therewith. In the absence of a protective
order or other appropriate remedy, the Receiving Party may disclose only that
portion of such Confidential Information that is legally required to be
disclosed. Notwithstanding anything to the contrary herein, nothing herein will
operate to restrict any Member or PSI Parent from making such disclosures as are
required, as advised by competent securities law counsel, to comply with any
applicable securities laws or regulations.
  (c)          Other Exceptions(PSI
Parent). The restrictions on disclosure of Confidential Information set forth in
Section 18.1
will not apply to information that the Receiving Party can
demonstrate:
  (i)           was
publicly known at the time of its communication to the Receiving
Party;
  (ii)          becomes
publicly known, through no fault of the Receiving Party or its Affiliates,
subsequent to the communication of such Confidential Information to the
Receiving Party;
  (iii)         was
in the Receiving Party’s possession prior to the communication of such
Confidential Information to the Receiving Party and is not otherwise subject to
a confidentiality obligation; or
  (iv)  
      was rightfully obtained by the Receiving
Party from a third party that is not under any obligation of confidentiality
with respect to such Confidential Information and is otherwise authorized to
make such disclosure without restriction.
  -54-
  18.3        Term (PSI
Parent) . The
confidentiality obligations provided for in Section 18.1 expire
upon the date that is two years after the date that is earlier to occur of the
following: (a) the date on which Quigley and its Affiliates cease to own
any Units or Unit Equivalents; and (b) PSI Parent ceases to own any Units
or Unit Equivalents (either directly and/or through one or more Subsidiaries);
provided, however, that the
confidentiality obligations provided for in Section 18.1
will survive indefinitely with respect to any Confidential Information that is a
trade secret.
  ARTICLE
19
 DISSOLUTION
AND LIQUIDATION
  19.1        Limitations . The
Company may be dissolved, liquidated and terminated only pursuant to the
provisions of this Article 19, and
the Members hereby irrevocably and unconditionally waive any and all other
rights they may have to cause a dissolution of the Company or a sale or
partition of any or all of the Company Entity Assets.
  19.2        Exclusive
Causes .
Notwithstanding the Act, the following and only the following events will
operate to cause the Company to be dissolved, liquidated and terminated by
virtue of the occurrence thereof:
  (a)          the
unanimous consent of all Members to dissolve, liquidate and terminate the
Company (or to take action that would otherwise cause the dissolution,
liquidation or termination of the Company);
  (b)          the
Board’s determination by Board Approval to dissolve, liquidate and terminate the
Company;
  (c)          the
entry of a decree of judicial dissolution pursuant to Section 18-802 of the
Act; provided,
that, notwithstanding anything to the contrary herein, each Member shall not
make an application for the dissolution of the Company pursuant to
Section 18-802 of the Act without the unanimous consent of all Members and
any such purported application will be null and void ab initio; or
  (d)          any
time there are no Members, unless the Company is continued in accordance with
the Act.
  Any
dissolution, liquidation or termination of the Company other than as provided in
this Section 19.2
will be in contravention of the terms hereof.
  19.3        Effect of
Dissolution . The
dissolution of the Company will be effective on the day on which the event
giving rise to such dissolution occurs, but, to the extent provided in the Act,
the Company will remain in existence for the purposes of and until it has been
wound up and the Company Assets have been distributed as provided in Section 19.5.
Notwithstanding the dissolution of the Company, prior to the termination of the
Company, the business of the Company and the affairs of the Members, as such,
will continue to be governed hereby.
  -55-
  19.4        No Capital Contribution upon
Dissolution . Each
Member is entitled to look solely to the Company Assets for all distributions
with respect to the Company, its Capital Contribution, its Capital Account and
its share of Net Profits or Net Losses, and such Member will not have recourse
therefor (upon dissolution or otherwise) against any other Member. Accordingly,
if any Member has a deficit balance in its Capital Account (after giving effect
to all contributions, distributions and allocations for all taxable years,
including the year during which the liquidation occurs), then such Member will
have no obligation to make any Capital Contribution with respect to such
deficit, and such deficit is not to be considered a debt owed to the Company or
to any other Person for any purpose whatsoever.
  19.5        Liquidation.
  (a)          Upon
the dissolution of the Company, the Board will act as liquidator or may appoint
one or more other Persons as liquidators (as the case may be, the “Liquidators”). The
Liquidators shall proceed diligently to wind up the affairs of the Company and
make final distributions as provided herein and in the Act. The Company shall
bear the costs of liquidation as an expense. Until final distribution of the
Company Assets, the Liquidators will be empowered to and shall continue to
operate the Company Assets with all of the power and authority of the
Board.
  (b)          The
Company is to be liquidated as follows:
  (i)           The
Liquidators shall pay, satisfy or discharge from the Company’s funds all of the
debts, liabilities and obligations of the Company (including all expenses
incurred in liquidation) or otherwise make adequate provision for payment and
discharge thereof (including the establishment of a cash fund for contingent
liabilities in such amount and for such term as the Liquidators may reasonably
determine).
  (ii)          As
promptly as practicable after dissolution, the Liquidators must
(A) determine the Fair Market Value (the “Liquidation FMV”) of
the remaining Company Assets at such time (the “Liquidation Assets”),
(B) determine the amounts to be distributed to each Member in accordance
with Section 11.3,
and (C) deliver to each Member a statement (the “Liquidation
Statement”), which will be final and binding upon the Members, setting
forth the Liquidation FMV and the amounts to be distributed in accordance with
Section 11.3 and
recipients of such distributions.
  (iii)         Promptly
after the Liquidators have delivered the Liquidation Statement pursuant to and
in accordance with Section 19.5(b)(ii),
the Liquidators must promptly distribute the Liquidation Assets to the Members
in accordance with Section 11.3.
  (iv)         In
making such distributions, the Liquidators shall allocate each type of
Liquidation Assets among the Members ratably based upon the aggregate amounts to
be distributed with respect to the Units held by each such Member; provided, that the
Liquidators may allocate each type of Liquidation Asset so as to give effect to
and take into account the relative priorities of the different Units, if
applicable. Any non-cash Liquidation Assets must first be written up or down to
their Fair Market Value, and the Net Profit or Net Loss created thereby (if any)
is to be allocated in accordance with Article 10. If,
after making such allocations, any Member’s Capital Account is not equal to the
amount to be distributed to such Member pursuant to Section 19.5(b)(iii),
then the Net Profits and Net Losses for the Fiscal Year in which the Company is
dissolved are to be allocated among the Members in such a manner as to cause, to
the extent possible, each Member’s Capital Account to be equal to the amount to
be distributed to such Member pursuant to Section 19.5(b)(iii).
  -56-
  (v)          The
distribution of Liquidation Assets to a Member in accordance with the provisions
of this Section 19.5(b)
will constitute a complete return to the Member of its Capital Contributions and
a complete distribution to the Member of its interest in the Company and all of
the Company Assets and will constitute a compromise to which all Members hereby
consent within the meaning of the Act. A Member will have no claim against any
other Member in respect of funds that it has returned to the
Company.
  19.6        Deferral; Distribution in
Kind .
Notwithstanding Section 19.5(a),
if the Liquidator reasonably determines that an immediate sale of all or any
portion of the Liquidation Assets would cause undue loss to the Members, then
the Liquidator, in order to avoid such loss to the extent not then prohibited by
the Act, may either defer liquidation of and withhold from distribution for a
reasonable time any Liquidation Assets, except those necessary to satisfy the
Company’s debts and obligations, or distribute the Liquidation Assets to the
Members in kind.
  ARTICLE
20
 MISCELLANEOUS
  20.1        Notices (PSI
Parent) . To be
valid for purposes hereof, any notice, request, demand, waiver, consent,
approval or other communication (any of the foregoing, a “Notice”) that is
required or permitted hereunder must be in writing. A Notice will be deemed
given only as follows: (i) on the date established by the sender as having
been delivered personally; (ii) on the date delivered by a reputable
overnight courier as established by the sender by evidence obtained from the
courier; (iii) on the date sent by facsimile, with confirmation of
transmission, if sent during normal business hours of the recipient (and, if not
sent during normal business hours of the recipient, then on the next Business
Day); or (iv) on the fifth Business Day after the date mailed, by certified
or registered mail, return receipt requested, international postage prepaid.
Subject to Sections
7.5(d) and 8.9(d), to be valid
for purposes hereof, a Notice must be delivered as follows:
  (a)          If
sent to a Member, to the address or facsimile, as the case may be, set forth in
the Member Schedule, together with a copy of such Notice delivered to the
recipient indentified immediately below such Member’s address (if any) at such
recipient’s specified address or facsimile;
  (b)          If
sent to the Company, to the following address or facsimile, as the case may
be:
  -57-
  Phusion
Laboratories, LLC
 621 N.
Shady Retreat Road
 Doylestown,
PA 18901
 Facsimile: (215)
345-5920
  With a
copy (the delivery of which, by itself, will not constitute a valid Notice to
the Company) to:
  Phosphagenics
Ltd.
 11
Duerdin Street, Clayton
 Victoria,
Australia 3168
 Attention: Harry
Rosen
 Facsimile: 61-3-9565
1151
  The
Quigley Corporation
 621 N.
Shady Retreat Road
 Doylestown,
PA 18901
 Attention: Ted
Karkus
 Facsimile: (215)
345-5920
  Reed
Smith LLP
 599
Lexington Avenue
 New York,
NY 10022
 Attention: Herbert F.
Kozlov, Esq.
 Facsimile: (212)
521-5450
  (c)           If
sent to PSI Parent, to the following address or facsimile, as the case may
be:
  Phosphagenics
Ltd.
 11
Duerdin Street, Clayton
 Victoria,
Australia 3168
 Attention: Harry
Rosen
 Facsimile: 61-3-9565
1151
  Alternatively,
a valid Notice may be delivered to such other address or to the attention of
such Person or Persons as the recipient Party has specified by prior written
notice (in accordance with this Section 20.1) to
the sending Party (or, in the case of counsel, to such other readily
ascertainable business address as such counsel may hereafter maintain). If more
than one method for sending Notice as set forth above is used, the earliest
notice date established as set forth above will control for purposes of
determining when such Notice is deemed to have been given.
  -58-
  20.2        Guaranty (PSI
Parent).
  (a)          PSI
Parent (i) hereby fully, unconditionally, irrevocably and absolutely
guarantees each obligation of PSI hereunder (such obligations, collectively, the
“PSI
Obligations”), (ii) shall cause PSI fully to comply with, to observe
and to perform each of the PSI Obligations and (iii) shall provide any and
all funds and take such action as may be necessary to enable and to cause PSI to
fully to comply with, to observe and to perform, and shall refrain from taking
any action that would prevent PSI from fully complying with, observing or
performing, each of the PSI Obligations. The guaranty provided pursuant to this
Section 20.2(a)
(the “Guaranty”) will
extend to performance of the PSI Obligations by any subsequent holder of PSI
Units and will inure to the benefit of any Person to which Quigley Units are
transferred in accordance with the term hereof. The Guaranty is a full,
unconditional, irrevocable, absolute and continuing guarantee of
performance.
  (b)          Quigley
hereby has a direct right of enforcement against PSI Parent for PSI’s failure to
comply in any respect with any of the PSI Obligations. The right of Quigley to
enforce the Guaranty fully against PSI Parent will in no way be impaired or
diminished by any enforcement of rights under any other Contract.
  (c)          PSI
Parent acknowledges that, by virtue of the Guaranty, PSI Parent specifically
assumes any and all risks that a bankruptcy, reorganization case or similar
proceeding of PSI may have with respect to PSI’s ability to comply with, to
observe or to perform the PSI Obligations and that no modification of the PSI
Obligations in connection with any such bankruptcy, reorganization case or
similar proceeding will operate to affect the obligation of PSI Parent under the
Guaranty with respect to the PSI Obligations as currently contemplated
hereby.
  (d)          In
addition to all other amounts payable by the PSI Parent hereunder, PSI Parent
hereby agrees to pay to Quigley upon demand any and all Losses that Quigley
incurs in any Suit to enforce the obligations of PSI Parent under the Guaranty
(to the extent that Quigley is successful in any such Suit).
  (e)          PSI
Parent is party hereto for purposes of those provisions with captions including
the following text: “(PSI Parent)”.
  20.3        Pre-Initial Public Offering
Transaction (PSI Parent).
  (a)          Subject
to any approvals required under any mandatory provisions of the Act, if at any
time the Board approves (with the requisite approval required hereunder) a
Pre-Initial Public Offering Transaction, then each Member shall take such steps
to effect such Pre-Initial Public Offering Transaction as may be reasonably
requested by the Board, including transferring or tendering such Member’s Units
to a Newco in exchange or consideration for shares of equity Securities of such
Newco (such equity Securities, “Newco Shares”), as
determined by the Board.
  (b)          The
Newco Shares that a Member receives in connection with the applicable
Pre-Initial Public Offering Transaction will be subject to (i) the
restrictions on Transfer under Article 14
(subject to the termination of such restrictions as provided in Section 14.4),
(ii) applicable restrictions under federal and state securities laws and
(iii) any restrictions set forth in the agreements or other instruments
relating to the applicable Initial Public Offering and/or such Pre-Initial
Public Offering Transaction.
  -59-
  (c)          In
connection with a Pre-Initial Public Offering Transaction, the Board shall, in
good faith, determine the Fair Market Value of the Company Assets and/or Units
transferred, the aggregate Fair Market Value of Newco and the number of Newco
Shares to be issued to each Member in exchange or consideration therefor in a
manner consistent with Section 19.5(b).
Neither the engagement of any appraisers nor any determination of value will
affect the right of the Board to terminate any Pre-Initial Public Offering
Transaction, which the Board may do at any time in its sole
discretion.
  20.4        Amendments (PSI
Parent).
  (a)          This
Agreement may be amended if, and only if, such amendment is in writing and is
signed by the Company, each Initial Member (if such Initial Member is a Member
at the time of such proposed amendment), each Permitted Transferee to which an
Initial Member has Transferred Units (if such Permitted Transferee is a Member
at the time of such proposed amendment), and the holders of a majority of all
Units issued and outstanding, and any such amendment will be binding upon all of
the Members; provided, however, that, if
such amendment would (i) disproportionately affect one or more classes
and/or series of Units in a materially adverse manner, then such amendment will
be valid only if the holders of a majority of the Units of each such class and
series agrees in writing thereto or (ii) otherwise disproportionately
affect one or more Members in a materially adverse manner, then such amendment
will be valid only if each such Member agrees in writing thereto.
  (b)          Other
than with respect to amendments to the Member Schedule, the Company shall
distribute to all Members any amendment hereof that has been effected in
accordance with the terms hereof. The Company shall from time to time, at the
direction and discretion of the Board, distribute updated versions of the Member
Schedule to all of the Members, and the Company shall provide a complete and
accurate Member Schedule to any Member upon the written request of such
Member.
  20.5        Waivers (PSI
Parent) . Any
Party may waive any right, power or privilege hereunder, but no such waiver will
be binding against any other Party. No such waiver will be enforceable against
such Party unless such waiver was effected pursuant to a written instrument
signed by such Party. The waiver by any Party of any right, power or privilege
hereunder arising because of any breach, default or misrepresentation under or
with respect to a provision hereof, whether intentional or not, will not thereby
extend (and will not be deemed to thereby extend) to any right, power or
privilege hereunder arising because of any prior or subsequent breach, default
or misrepresentation, respectively, and will not affect in any way any rights,
powers or privileges arising by virtue of any such prior or subsequent
occurrence. No failure or delay by any Party in exercising any right, power or
privilege hereunder will operate as a waiver thereof, nor will any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege.
  -60-
  20.6        Successors and Assigns (PSI
Parent) . Except
as expressly provided herein, this Agreement
may not be assigned by any Party without the prior written consent of each other
Party. This Agreement will be binding upon the Parties and their respective
successors and assigns and will inure to the benefit of the Parties and their
respective successors and permitted assigns.
  20.7        Governing Law (PSI
Parent) . This
Agreement is governed by, and is to be interpreted and enforced in accordance
with, the internal Laws of the State of Delaware applicable to contracts entered
into and performed entirely within the State of Delaware, without giving effect
to any choice of Law or conflict of Laws rules or provisions (whether of the
State of Delaware or any other jurisdiction) that would cause the application of
the Laws of any jurisdiction other than the State of Delaware.
  20.8        Dispute Resolution and
Arbitration (PSI Parent) . If any
dispute arises between or among the Parties regarding or relating to this
Agreement, then, IN LIEU OF LITIGATION AND A TRIAL BY JURY, the Parties hereby
consent to and shall resolve such dispute through mandatory arbitration under
the Commercial Rules of the American Arbitration Association, before a single
arbitrator in New York, New York. The Parties hereby consent to the entry of
judgment upon  an award being rendered by the arbitrator in any court
of competent jurisdiction. Notwithstanding the foregoing, if adequate grounds
exist for seeking immediate injunctive or immediate equitable relief, any Party
may seek and obtain such relief; provided, that, upon
obtaining such relief, such injunctive or equitable action will be stayed
pending the resolution of the arbitration proceedings called for herein. The
Parties hereby consent to the exclusive jurisdiction in the state and Federal
courts located in the City of New York, County of New York and State of New York
for purposes of seeking such injunctive or equitable relief as set forth above.
Except as otherwise provided herein, each party to any arbitration contemplated
hereby shall bear its own costs; provided, however, that any
fees assessed by the American Arbitration Association shall be allocated equally
between the entities who are parties to such arbitration. PSI Parent hereby
consents to being bound by this Section 20.8
and, if any dispute arises involving PSI or PSI Parent, each of PSI and PSI
Parent (a) is hereby bound by the determination of the decision of the
arbitrator in the arbitration with respect to such dispute, (b) is entitled
to participate in such arbitration and may be made a party to such arbitration,
and (c) will not be entitled to and shall not institute or seek to
institute a separate arbitration with respect to such dispute. Service of
process upon any Party may be made in the same manner as Notice may be duly
provided pursuant to Section 20.1.
  20.9        Counterparts (PSI
Parent) . This
Agreement may be executed in multiple counterparts, and any Party may execute
any such counterpart, each of which when executed and delivered will thereby be
deemed to be an original and all of which taken together will constitute one and
the same instrument. The delivery of this Agreement may be effected by means of
an exchange of facsimile or portable document format (.pdf)
signatures.
  20.10     
Effectiveness (PSI
Parent) . This
Agreement will become effective as of the Effective Date when each Party has
duly executed this Agreement and duly delivered this Agreement to each other
Party; provided, however, that neither
PSI nor PSI Parent is required to deliver this Agreement to the other in order
for this Agreement to be so effective.
  -61-
  20.11     
No Third-Party
Beneficiaries (PSI Parent) . Except
as provided in Article 17, no provision
hereof is intended to confer, will not confer and will not be deemed to confer
upon any Person other than the Parties, their respective successors and their
respective permitted assigns any rights or remedies hereunder.
  20.12      Entire Agreement (PSI
Parent) . This
Agreement, all documents delivered in connection with a Member’s admission to
the Company as a Member, all documents delivered by a Party pursuant to the
terms hereof and (with respect to the Persons that are party to the Related
Agreements) the Related Agreements, (a) set forth the entire understanding
of the Parties with respect to the subject matter hereof and thereof the
transactions contemplated hereby and thereby and (b) supersede any and all
previous agreements and understandings between or among the Parties regarding
the subject matter hereof or thereof, whether written or oral.
  20.13      Captions (PSI
Parent) . All
captions contained herein are for convenience of reference only, do not form a
part hereof and are not to affect in any way the meaning or interpretation
hereof.
  20.14      Severability (PSI
Parent) . If any
portion or provision hereof is to any extent declared illegal or unenforceable
by a court of competent jurisdiction, then the remainder of this Agreement, and
the application of such portion or provision in circumstances other than those
as to which it is so declared illegal or unenforceable, will not be affected
thereby, and each portion and provision hereof will be valid and enforceable to
the fullest extent permitted by Law.
  20.15      Interpretation (PSI
Parent) . The
Parties have participated jointly in the negotiation and drafting of this
Agreement, and any rule of construction or interpretation otherwise requiring
this Agreement to be construed or interpreted against any Party by virtue of the
authorship of this Agreement is not to affect the construction and
interpretation hereof.
  20.16      Consent to Jurisdiction and
Venue (PSI Parent) . Each
Party hereby irrevocably submits to the exclusive jurisdiction of, and venue in,
any state or federal court located within City of New York in the state of New
York for the purposes of any Suit arising out of this Agreement or any
transaction contemplated hereby, and agrees to commence any such Suit only in
such courts. Each Party further agrees that service of any process, summons,
notice or document by U.S. registered mail to such Party’s respective address
set forth herein will be effective service of process for any such Suit. Each
Party hereby irrevocably and unconditionally waives any objection to the laying
of venue of any Suit arising out of this Agreement or the transactions
contemplated hereby in such courts, and hereby irrevocably and unconditionally
waives and agrees not to plead or claim in any such court that any such Suit
brought in any such court has been brought in an inconvenient
forum.
  20.17      Specific Performance (PSI
Parent) . Each
Party acknowledges that the rights of each
other Party contemplated hereby are special, unique and of extraordinary
character and that, if a Party violates or fails and refuses to perform any
covenant made by it herein, then each other Party may be without an adequate
remedy at law. If a Party violates or fails and refuses to perform any covenant
that it makes hereunder, each other Party may (except to the extent the
satisfaction of such covenant been has been waived by such other Party in
accordance with the terms hereof), in addition to any remedies for damages or
other relief, institute and prosecute an action in any court of competent
jurisdiction (subject to Section 20.16)
to enforce specific performance of such covenant or seek any other equitable
relief. This Section 20.16 is
subject to Section 20.8.
  -62-
  20.18      Further Assurances (PSI
Parent) . Each
Party shall, without further consideration, prepare, execute, acknowledge, file,
record, publish and deliver such other instruments, documents and statements,
and take such other action as may be required by Law or reasonably necessary to
effectively carry out the purposes hereof.
  20.19      Signed Writings (PSI
Parent) . Emails,
including emails that bear an electronic “signature block” identifying the
sender, do not constitute signed writings for purposes hereof.
  20.20      Business Days (PSI
Parent) . If any
date by which an action is to be taken, or by which a notice is to be provided,
hereunder falls on a day other than a Business Day, then such date is to be
deemed to refer to the first Business Day following such date.
  20.21      Access to Counsel (PSI
Parent) . Each
Member acknowledges that it has had adequate opportunity to engage its own legal
counsel in connection with its entry into this Agreement.
  20.22      Employment (PSI
Parent) . Nothing
herein (a) creates an employer-employee relationship between any Company
Entity, on the one hand, and any Member or Affiliate of any Member, on the
other, (b) obligates any Company Entity to employ any Member or any
Affiliate of any Member or (c) prohibits or restricts any Company Entity
from terminating, at any time or for any reason, the employment of any employee
that is a Member or an Affiliate of a Member.
  20.23      Indemnification Against
Certain Claims (PSI Parent) . Each
Party (such Party, the “Indemnifying Party”)
shall indemnify each other Party (each such other Party, an “Indemnified Party”)
against any and all liabilities, losses, damages, costs and expenses (including
attorneys’ and other experts’ fees and other legal costs, including those
related to any appeal, and costs of any investigation) if such Indemnified Party
is subjected to or becomes involved in any Suits arising from or relating to the
assertion of claims by any Affiliate or shareholder of the Indemnifying Party
relating to the grant of the license covered by the License Agreement, entering
into this Agreement or the payment of the license fee under the License
Agreement or of any amounts hereunder.
  20.24      Reimbursement of Certain
Expenses (PSI Parent) . On or
promptly after the Effective Date, the Company shall reimburse Quigley for the
costs charged by Reed Smith LLP that Quigley incurred in connection with the
Company’s formation and the execution and delivery of this Agreement and the
other documents entered into in connection herewith; provided, however, that the
Company is not required to so reimburse Quigley pursuant to this
Section 20.24 for more than $75,000 in such costs.
  20.25      Controlling Provisions (PSI
Parent) . To the
extent that the terms of the License Agreement conflict with the terms hereof,
the terms of the License Agreement control.
  [Signature
page follows.]
  -63-
  The
Parties are signing this Agreement as of the Effective Date.
  THE
      QUIGLEY CORPORATIONBy:
                      /s/
      Ted KarkusName:  Ted
      KarkusTitle:  Chief
      Executive OfficerPHOSPHAGENICS
      INC.By:
                      /s/
      Fred BantiName:  Fred
      BantiTitle:  PresidentPHUSION
      LABORATORIES, LLCBy:
                      /s/
      Ted KarkusName:  Ted
      KarkusTitle:  Co-Chief
      Executive OfficerPHOSPHAGENICS
      LTD.,for
      the purposes set forth in the preamble (including Section
      20.2)By:
                      /s/
      Fred BantiName:  Fred
      BantiTitle:
      Senior Vice President and Chief Business
Officer
  
  Exhibit
A
  Member
                                                                                                      
                                                                                                      Address
                                                                                                      
                                                                                                      Initial Capital
                                                                                                        Contributions
                                                                                                      
                                                                                                      Number of UnitsThe
      Quigley Corporation
                                                                                                      
                                                                                                      621
      N. Shady Retreat Road
                                                                                                      
                                                                                                      $
                                                                                                      [4,500,000
                                                                                                      ]
                                                                                                      1,000
      UnitsDoylestown,
      PA 18901Attention: Ted
      KarkusFacsimile:
      (215) 345-5920Email:
      Karkus@Quigleyco.comWith
      a copy to:Reed
      Smith LLP599
      Lexington AvenueNew
      York, NY 10022Attention:
      Herbert F. Kozlov, Esq.Facsimile:
      (212) 521-5450Email:
      HKozlov@reedsmith.comPhosphagenics
      Inc.
                                                                                                      
                                                                                                      c/o
      Phosphagenics Ltd.
                                                                                                      
                                                                                                      $
                                                                                                      0
                                                                                                      
                                                                                                      1,000
      Units11
      Duerdin Street, ClaytonVictoria,
      Australia 3168Attention:
      Harry RosenFacsimile:
      +61-3-9565 1151Email:
      hrosen@phosphagenics.com
  
  Exhibit
B
  Initial
Managers
  Quigley Designated
Managers
  Ted
Karkus
  Robert
Cuddihy
  PSI Designated
Managers
  Harry
Rosen
  Fred
Banti
  
  Exhibit
C
  List of
Certain Compounds
  List of
compounds that we have agreed to use on a non-exclusive worldwide basis in
combination with OTC actives and / or in regimens:
 
 §
              Peptides
 §
              Amino
      acids
 §
              Lipoaminoacids
      (Palmitoyl glycine Cocoyl alanine)
 §
              Alpha
      hydroxy acids
 §
              Vitamins
      B, C, D (all forms)
 §
              Alpha
      lipoic acid
 §
              Sodium
      hyaluronate
 §
              Allantoin
 §
              Panthenol
 §
              Ceramides
 §
              TPM
 §
              Niacinamide
 §
              Retinyl
      propionate
 §
              Lycopene
 §
              Omega-3
      fatty acids
 §
              GABA
 §
              Polyphenols
 §
              Phytosterols
 §
              Quercetin
 §
              Tea
      Tree Oil
 §
              Evening
      Primrose Oil
 §
              Phenylalanine
 §
              Glucuronolactone
 §
              Inositol
 §
              Tyrosine
 §
              Citicoline
 §
              Taurine